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03.01 Maximum Loan Term and Exit (Repayment) Strategy

Policy ID

03.01

Policy Name

Maximum Loan Term and Exit (Repayment) Strategy

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Maximum loan term
2.1.1 Maximum Loan Term for Interest Only (IO) products
2.2 Retirement age and exit / repayment strategy
2.2.1 Retirement age and exit / repayment strategy
2.2.2 Exit (repayment) strategy exclusions
3. Process to follow
3.1 Record Keeping Requirement under Responsible Lending
3.2 Exit strategy-Non-real estate and real estate assets
3.2.1 Shareholding calculation
3.2.2 ASIC MoneySmart Superannuation Calculator settings
4. Guidelines
4.1 Examples of acceptable and non-compliant responses to exit strategy questions
4.2 Examples of acceptable and non-acceptable use of Superannuation lump sum as exit strategy

1. About this policy

1.1 Why this policy?

This policy will help you determine the maximum loan term when assessing a residential loan application.

Refer to individual Product Policies for any additional loan term restrictions or requirements that may apply to specific products.

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

2. Rules you must apply

2.1 Maximum loan term

The maximum term for an amortising loan is 30 years including any initial interest only (IO) period, however this may depend on the applicant’s age.
The maximum term for a bridging loan is 12 months.

For details regarding maximum Interest Only terms refer to the table Maximum loan terms for interest only (IO) products.

Consideration should be given to the applicant’s remaining time in the workforce. The applicant’s ability to retire or service the new debt without the applicant incurring substantial hardship post retirement age must be considered.

The ability to meet repayment obligations and clear the debt may be from:

Income (including retirement income), or
Asset equity including the sale of an asset (other than primary place of residence except where the sale and downsize of the property is appropriate)

2.1.1 Maximum Loan Term for interest only (IO) products

Category	Policy rule
Interest only (IO) converting loans repayment term	The maximum interest only repayment period is determined by the purpose of the loan as follows: Owner occupied – the interest only repayment period may be for a minimum of 1 year up to a maximum of 5 years. Investment – the interest only repayment period may be for a minimum of 1 year up to a maximum of 10 years. The contract loan term will be the total of the IO period plus the amortising principal and interest (P&I) period. The maximum total term is 30 years, noting : Construction loans exclude the maximum 24-month construction period (i.e. the interest only period allowable to complete construction) when calculating maximum loan term. Refer to Serviceability Assessment > Payment used for serviceability IO loans are to have a minimum loan term of the requested IO repayment period and at least an additional 1-year P&I term. IO terms can be extended within product maximums. i.e. 2 year initial term and a further 3 years applied via a term extension. After the maximum IO term expires, the loan must be converted to P&I repayments. Further IO terms will require reorigination For an existing owner occupied or investment loan, any requests for extension beyond the maximum IO repayment period will require the loan to be re-originated to legacy policy

Category

Policy rule

Interest only (IO) converting loans repayment term

The maximum interest only repayment period is determined by the purpose of the loan as follows:
- Owner occupied – the interest only repayment period may be for a minimum of 1 year up to a maximum of 5 years.
- Investment – the interest only repayment period may be for a minimum of 1 year up to a maximum of 10 years.
The contract loan term will be the total of the IO period plus the amortising principal and interest (P&I) period.
The maximum total term is 30 years, noting :
- Construction loans exclude the maximum 24-month construction period (i.e. the interest only period allowable to complete construction) when calculating maximum loan term. Refer to Serviceability Assessment > Payment used for serviceability
IO loans are to have a minimum loan term of the requested IO repayment period and at least an additional 1-year P&I term.
IO terms can be extended within product maximums. i.e. 2 year initial term and a further 3 years applied via a term extension.
After the maximum IO term expires, the loan must be converted to P&I repayments. Further IO terms will require reorigination
For an existing owner occupied or investment loan, any requests for extension beyond the maximum IO repayment period will require the loan to be re-originated to legacy policy

2.2 Exit (Repayment) Strategy – Responsible Lending

During the Requirement and Objective (R&O) conversation, where any applicant or Income Guarantor ('Spousal-Income + Security Guarantee’ or ‘Spousal - Income Guarantee') is 45 years or older , the lender / assessor (via the broker) must:

Make further enquiries to find out when the applicant or Income Guarantor intends to retire (retirement age) and follow the additional requirements detailed in the Retirement age and exit / repayment strategy table. And
Provide the applicant / income guarantor’s with an estimate of the projected outstanding loan balance at their declared retirement age. And
Record the declared retirement age and the projected outstanding loan balance at the declared retirement age in the “what you told us” (Responsible lending questions) section of the loan application. And
Where the applicant / income guarantor’s is:
- Equal to or greater than 55 years of age;
- 45 years or older and is less than 10 years from retirement, then:

the declared exit / repayment strategy must also be documented.

Where there is more than one applicant / income reliant guarantor, the age of the oldest applicant or income guarantor is to be used when assessing the maximum loan term.

Where a combination of exit / repayment strategies will be used, the details of each strategy must be documented.
When the applicant / income guarantor’s is relying on one or more of the below strategies, the associated asset values (where applicable) must be greater than or equal to the amortised loan amount for the loan being requested at the intended retirement age.

2.2.1 Retirement age and exit / repayment strategy

Loan applicant / income guarantor’s age and number of years from retirement	Exit / repayment strategy	Additional requirements	Verification¹
45 to less than 55 years of age and more than 10 years from retiring	Not required	No additional requirements	Not required
Is 55 years of age or older. OR 45 years or older and is less than 10 years from retiring	Repayment of loan prior to retirement	The loan term must not extend past the declared retirement age.	The age and loan term as recorded in the loan origination system must be used.
	Downsizing home (Owner Occupied Primary Residence) Or Sale of assets (Secondary Residence, Holiday home or Investment property)	The property owner/s must match the applicant / income guarantor’s of the new loan only.	Where the property is being purchased and used as security collateral for the loan application use: The contract of sale When the property is already owned and used as security collateral for the loan application use: Title search as obtained through normal loan processing When the property is not security collateral for the loan application use: Council rates notice/s or Utility bills or Settlement statement or Internal system evidence where property is mortgaged to WBC / SGB / BoM / BSA
		Confirm the current property value	When the property is security collateral for the loan application use: The security assessment / valuation as obtained through normal loan processing – refer Security Collateral Value When the property is not security collateral for the loan application use: Existing valuation where property is mortgaged to WBC / SGB / BoM / BSA. Refer 'Security Collateral Value'; or Westpac Property Report* obtained via Property Hub or RPData. Use the estimated value figure from the report. If no estimated value figure is provided on the report or the report cannot be obtained, then use: AVM. If no AVM result or customer estimate not validated by AVM, then use: Desktop or Residential shortform valuation * Refer Document Standards > Westpac Property Report
		Confirm the Limit and balance of existing debt (if any) against the property	Documents as obtained through normal loan processing, refer Commitments > Confirm details of the commitment
		Confirm the amortised loan amount at the declared retirement age
		Confirm that the current property value is sufficient repay and close all debt supported by the property	Add any existing debt secured by the property to the calculated amortised loan amount then subtract this amount from the current property value.
	Recurring income from superannuation	Serviceability must be assessed based on the superannuation income only	Refer Verifying Income > Supplementary Income types > Superannuation income
	Superannuation lump sum following retirement Corporate Industry and Retail superannuation fund.	Superannuation fund account holder must be the applicant / income guarantor’s The superfund member’s current balance must not be less than the amortised loan amount at the stated retirement age. Where superannuation is the sole exit strategy and the current super balance is lower than the amortised loan amount at the intended retirement age, the projected super amount can be considered as the asset value if the below is held: A Superannuation fund statement showing the projected superannuation balance at the applicant’s retirement age or Statement of Advice or Record of Advice from the borrower’s financial advisor / planner of the projected superannuation balance at the applicant’s retirement age or A superannuation balance projection produced using the ASIC MoneySmart Superannuation Calculator ( https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/superannuation-calculator). Refer to 3.2.2 ASIC MoneySmart Superannuation Calculator settings	Superannuation fund statement; or Australian Taxation Office Superannuation ‘fund details’ extract from myGov portal; or For BT Superannuation fund holders where no superannuation fund statement is available you may use: Account summary / extract / overview Internal Westpac system extract or enquiry For non-BT Superannuation funds where no superannuation fund statement is available you may use: Account summary / extract / overview
	Superannuation lump sum following retirement Self-managed superannuation fund (SMSF)	Confirm the SMSF name Superannuation fund account holder must be the applicant / income guarantor’s The superfund member’s current balance must not be less than the amortised loan amount at the stated retirement age.	SMSF Australian Tax return accompanied by financial statements and a signed Auditors statement.
	Savings Includes (but not limited to): Bank accounts, term deposits, debentures with a financial institution Shares held in publicly listed companies Managed funds Other investment funds	The account holder must be the applicant / income guarantor’s only The savings balance / investment value must be no less than the loan amount plus any mortgage allocated to the security collateral.	Account statement; or Account transaction listing; or Account summary / extract / overview; or Internal system extract or enquiry; or Investment certificate; or Managed fund statement Share registry statement; To determine the value of Shares held in publicly listed company, calculation required: Number of shares / units x ASX price Refer to 3.2.1 Shareholding calculation
	Income from other investments	Serviceability must be assessed based on the income from other investments only	Refer Verifying Income > Supplementary Income
	Co-applicants income	Serviceability must be assessed based on the co-applicants income only	Refer Verifying Income
	Other exit strategy not detailed above	The loan application must be referred to credit for exception consideration	Supporting documents evidencing the declared exit strategy, where applicable
¹ The documents used for verification must: Comply with specific rules set out in this policy and Comply with Document Standards and Be retained in the loan file

2.2.1 Exit (repayment) strategy exclusions

We do not need to capture repayment strategy in the following scenarios:

Where the applicant is already retired at the time they take the loan out and serviceability is calculated only on their retirement income
Bridging loans with no end debt (as serviceability is not required to be demonstrated)
Guarantors offering non income reliant guarantees
- Spousal-Security Guarantee, or
- Family-Security Guarantee, or
- Shared Equity Guarantee

3. Process to follow

3.1 Record Keeping Requirement under Responsible Lending

In all cases the outcomes of the Retirement Strategy – Responsible Lending questions must be documented. Where a combination of strategies will be used, the details of each strategy must be documented.

Brokers will use Applyonline to capture this information in application notes.

Refer to Guidelines for Examples of Acceptable and Non-compliant Responses to Exit Strategy questions.

3.2 Exit strategy-Non-real estate and real estate assets

Process
In the origination system, record the value of the asset/s used in the exit strategy: for non-real estate assets enter the ‘account balance’ – refer to Verifying non-real estate assets for real estate assets enter the ‘property value’ – refer to Verifying real-estate assets Note: If the applicant’s declared value (from the loan application form) does not match the information in the supporting documents, adjust the value of the assets in the loan assessment

Process

In the origination system, record the value of the asset/s used in the exit strategy:

for non-real estate assets enter the ‘account balance’ – refer to Verifying non-real estate assets
for real estate assets enter the ‘property value’ – refer to Verifying real-estate assets

Note: If the applicant’s declared value (from the loan application form) does not match the information in the supporting documents, adjust the value of the assets in the loan assessment

3.2.1 Shareholding calculation

1. Access the asx website: https://www.asx.com.au/, from the shareholding certificate identify the company ASX code.
2. Enter the code into the look up field
3. From the drop down list select the correct issuer, hit enter.
Graphical user interface, website

Description automatically generated

Graphical user interface, website

Description automatically generated

4. Identify the “last” value (as highlighted above)
5. Retain a copy of the ASX search result
6. Multiply the number of shares held x last value
7. Record the result of the calculation as the ‘account balance'

3.2.2 ASIC MoneySmart Superannuation Calculator settings

Populate the “You and your super fund” section of the calculator with the borrowers’ information:

Age
Income before tax
Desired retirement age
Super balance as verified on a recent Superannuation statement (Superannuation balance may be a combination from various Superannuation funds)
Employer contribution – set as the default value and unchanged [per disclaimers on the site, ASIC MoneySmart’s calculator also automatically updates to reflect the mandatory Government superannuation contribution]
Additional contributions – set as “No”
Contribution fee % - set as “0%”
Admin fees – set as “$50”
Indirect cost ratio – set as “0.6%”
Fee level – set as “Other”
Investment option – set as “Other”
Investment return – set as “3.80%”
Tax on earning – set as “10.60%”
Investment fees - set as “0.30%”

4. Guidelines

4.1 Examples of acceptable and non-compliant responses to exit strategy questions

Category	Guidelines
Examples of appropriate comments (this is not an exhaustive list)	‘The customer plans to pay off the loan before their retirement age and currently has enough surplus income to do this.’ ‘The customer has or will have income from other investments that can be used to service the debt following retirement. Details of the other investments are […].’ ‘The customer has and will continue to have income from superannuation that can be used to service the debt following retirement. Their current superannuation balance is $[...].’ As long as the total in superannuation supports the loan and leaves enough for the customer to live off, this is acceptable. ‘The customer currently has recurring rental income of $[…] per week that I have verified; this can be used to service the debt following retirement.’ ‘The customer has other assets that they can sell to pay the remainder of the loan amount, without the risk of any financial hardship. Details of the other assets are […].’ ‘The customer is an SMSF individual trustee who purchased the property as a superannuation investment. They advised that the property will be sold when contributions can no longer be made.’ The customer is proposing to replace a real estate asset with one of a lower value (downsizing of property). The owner occupied property is [….]’
Examples of responses which are not compliant (this is not an exhaustive list)	‘The customer plans to retire during the loan term but that in all likelihood they will probably get an inheritance before they retire, so they should be able to repay the loan.’ ‘Customer plans to win the lottery!’ ‘Customer says: “If something bad happens to me financially, my insurance should cover everything.’ ‘Exit strategy is evident based on customer’s financial position and accounts held with us.’

4.2 Examples of acceptable and non-acceptable use of Superannuation lump sum as exit strategy

#	Scenario	When applicant declares that they intend to use Superannuation as an Exit Strategy during R&O. Does they intend to be retiring at age 67 or more (Government Age Pension age)? Please note: all scenarios will require a retirement age that meets super preservation age.
1	Applicant indicates they will be retiring at 65yrs. The loan is secured against an investment security collateral only. The customer also owns (unencumbered or mortgaged) an owner occupied residence not offered as security collateral	No. The 67yrs requirement doesn’t apply as applicant will have 2 real estate properties upon loan settlement (i.e. new investment property and existing OO).
2	Applicant indicates they will be retiring at 62yrs. The loan is secured against an investment security collateral only. The customer does not hold / own any owner occupied residence (i.e. they are renting)	Yes. The 67yrs requirement is applicable here as applicant only has 1 real estate property upon loan settlement. Given applicant indicates they plan to retire at 62yrs the use of superannuation as an exit strategy is not allowed as per policy. would be required to have further discussion with customers to explore other sources of exit strategy.
3	Applicant indicates they will be retiring at 66yrs. The loan is secured against an owner occupied primary security collateral and investment security collateral.	No. The 67yrs requirement doesn’t apply as applicant will have 2 real estate properties upon loan settlement (i.e. investment property and OO).
4	Applicant indicates they will be retiring at 65yrs. The loan is secured against an owner occupied security collateral only. The customer has other non –real estate assets (savings, shares) but no other real estate assets.	Yes. The 67yrs requirement is applicable here as applicant only has 1 real estate property upon loan settlement. Given applicant indicates they plan to retire at 65yrs the use of superannuation as an exit strategy is not allowed as per policy. Broker would be required to have further discussion with customers to explore other sources of exit strategy.
5	Applicant indicates they will be retiring at 62yrs. The loan is secured against an owner occupied primary security collateral and owner occupied secondary security collateral The customer has no assets other than super and the above properties	No. The 67yrs requirement doesn’t apply as applicant will have 2 real estate properties upon loan settlement (i.e. primary and secondary OO properties).
6	Applicant indicates they will be retiring at 62yrs. The loan is secured against an owner occupied secondary security collateral only (holiday home). The applicant also holds another owner occupied residence (i.e. their primary place of residence)	No. The 67yrs requirement doesn’t apply as applicant will have 2 real estate properties upon loan settlement (i.e. primary and secondary OO properties).

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform
2	20 February 2022	Section ‘2.4 Referring to Credit’ has been deleted from policy. The Net Equity calculation continues to apply however there is no longer a requirement to refer to Credit for MI applications. The remaining sections within this chapter have been renumbered as a result of the removal of section 2.4
3	3 April 2022	Change to Chapter name from ‘Maximum Loan term’ to Maximum Loan Term and Exit (Repayment) Strategy General rewrite to improve policy clarity Deleted section ‘Net Equity Calculation’. This calculation was performed by the system and became redundant with the change detailed under 20 Feb 2022.
4	22 May 2022	Updated section ‘Rules > Exit (Repayment) Strategy Exclusions’ to add ‘Shared Equity Guarantee’ to the list of guarantee types which do not require an exit (repayment) strategy as there is no reliance on the guarantor to service/repay the debt
5	17 July 2022	Minor typo corrections
6	21 August 2022	Change 1 Impacted section 2.3.3 Verifying non-real estate assets. New supporting document type added for verifying asset type > Corporate Industry and retail superannuation. Old wording – Verify by: Superannuation fund statement; or For BT Superannuation fund holders where no superannuation fund statement is available you may use: Account summary / extract / overview Internal Westpac system extract or enquiry For non BT Superannuation funds where no superannuation fund statement is available you may use: Account summary / extract / overview New wording – Verify by: Superannuation fund statement; or Australian Taxation Office Superannuation ‘fund details’ extract from myGov portal; or For BT Superannuation fund holders where no superannuation fund statement is available you may use: Account summary / extract / overview Internal Westpac system extract or enquiry For non BT Superannuation funds where no superannuation fund statement is available you may use: Account summary / extract / overview Change 2 Policy housekeeping - Impacted section 2.3.3 Verifying non-real estate assets, asset type > Self-managed superannuation fund (SMSF) Old wording SMSF Tax return accompanied by financial statements and a signed Auditors statement. Review the balance sheet to identify the net SMSF position New wording SMSF Australian Tax return accompanied by financial statements and a signed Auditors statement. Review the balance sheet to identify the net SMSF position Change 3 Deleted references to the ‘Minimum Document Standards Matrix’. The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter.
7	20 November 2022	Change 1 Updated section ‘2.3.4 Verifying real estate assets’ against ‘property value’ row for real estate not offered as security collateral for this loan: Wording changed from: Existing valuation where property is mortgaged to WBC / SGB / BoM / BSA. Refer 'Security Collateral Value'; or Westpac Property Report obtained via Property Hub. Use estimated value figure. If no estimated value figure provided, then use AVM , if no AVM result or customer estimate not validated by AVM, then use Desktop or Residential shortform valuation. Wording changed to Existing valuation where property is mortgaged to WBC / SGB / BoM / BSA. Refer 'Security Collateral Value'; or Westpac Property Report obtained via Property Hub. Use the estimated value figure from the report. If no estimated value figure is provided on the report or the report cannot be obtained, then use: AVM. If no AVM result or customer estimate not validated by AVM, then use: Desktop or Residential shortform valuation
8	11 May 2023	2.3.3 Verifying non-real estate assets table ASIC MoneySmart Superannuation Calculator settings Added: Tax on earning – set as “10.60%” Investment fees - set as “0.30%”
9-11	21 May 2023	Change 1 Policy updated to define Exit strategy criteria where the applicant / income guarantor’s is: 45 to less than 55 years of age and more than 10 years from retiring Equal to or greater than 55 years of age; 45 years or older and is less than 10 years from retirement. Change 2 Complete re-write to simplify and clarify requirements
12	20 August 2023	Change 1 Update Retirement age and exit / repayment strategy – to cover use of Westpac Property report age of document

Rate this policy Submitting... Thank you for your feedback! There was an error with your submission. Please try again.	Published Date Published Date 20/08/2023

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03.02 Acceptable Security Collateral

Policy ID

03.02

Policy Name

Acceptable Security Collateral

Policy Content

1. About this policy

1.1 Why this policy

This policy will help you determine which real estate and non-real estate security collateral we consider acceptable for consumer mortgages.

To determine the maximum loan to value ratio (LVR) and valuation requirement for each type of security collateral, refer to the Loan to Value Ratio (LVR) policy and Security Collateral Value policy.

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance, where required.

1.2 What is residential real estate security collateral?

The Bank's consumer mortgage lending policy is primarily directed towards standard residential real estate, but non-standard developments may also be acceptable.

The below table details the policy rules for acceptable real estate security collateral.

Requirement	Policy Rules
Standard real estate	Includes houses, villas, units, vacant land zoned for residential use (up to 8 hectares) and others as defined in this policy. For description of each security type, refer to Glossary.
Non-standard developments	Non-standard real estate is land or dwellings that are not typical for example: holiday resort-style accommodation or former commercial real estate converted into apartments. We may accept non-standard provided the customer meets certain conditions. For description of each security type, refer to Glossary.
Security collateral objective	To ensure the borrower's root of title, the Banks' ability to register its mortgage and having marketable value sufficient to offset the Bank's exposure during the term of the facility.
Assessing the market value of the security collateral	The following factors are to be taken into account: Downturn in market values resulting in decreased margins Decrease in the present income stream with resulting serviceability and (capitalised) valuation problems Increased impact on serviceability where highly geared proposals are concerned The potential impact of any of the above occurring at any time during the Bank's exposure is to be considered at the time of credit assessment

Commercial real estate is not acceptable as security collateral in a consumer loan.

2. Rules you must apply

2.1 Certificate of title

A certificate of title is a document that officially grants ownership to the holder of the property referenced by that title .

The below table details the policy rules associated with obtaining and checking a title search.

Requirement	Policy Rules
Obtain a title search	When assessing property for its acceptability as Security Collateral for a new loan, loan increase or loan variation we must complete a title search to confirm root of title which includes identifying: The type of title Who is the registered proprietor (the owner) Any prior mortgages and their priority ranking Any other restrictions or dealings registered on the title or lodged which could impact the Banks' ability to register its mortgage or act on a mortgage once registered
Responsibilities	It is the responsibility of the assessor to: obtain a copy of the title search and any dealings (registered or lodged) on the certificate of title prior to formal loan approval review the title search, interests and dealings to ensure the property is acceptable as security comply with the requirements and rules in this table obtain Credit (or other Credit Risk authorised staff) approval as required
Age of title search	Must comply with Document Standards
Property Ownership	Property already owned	The owners as shown on the title search, must be exactly the same as the borrowers (and any guarantors if required)
	Property being purchased	The vendor / transferrer as shown on the contract of sale and transfer description must be exactly the same as the registered proprietor (the owner)
	Part ownership	A purchase of a part ownership share in a property cannot be considered when all owners of the security collateral offered, are not part of the loan application as either borrowers or guarantors. In all instances the borrowers / guarantors must own or be purchasing (in the new loan application) 100% of the property and have exclusive use and occupation entitlement of the property used as supporting security collateral.
	Company title, Moiety title	The borrowers / guarantors must own or be purchasing 100% of the shares associated with the specific unit offered as security and have exclusive use and occupation entitlement.
	Leasehold title	The borrowers / guarantors must be the same as the lessee, of the portion offered as supporting security collateral and have exclusive use and occupation entitlement of the property used as supporting security collateral.
Interests / dealings on title	The title must be free of any mortgages, caveats, restrictive encumbrances, writs, notifications or dealings that will not be removed prior to or simultaneously at loan settlement Exceptions may apply: For Second Mortgages When approval has been granted by Credit (or other Credit Risk authorised staff)
Second Mortgage	Prior internal¹mortgage	Acceptable to remain on title. No additional policy rules or restrictions
	Prior external¹mortgage	The conditions detailed under 'Second Mortgage behind other financial institution (OFI)' apply Use of second mortgage may also be restricted by other policies. Refer to: Loan to value ratio>Assessing second mortgage Guarantees Specific Product Policies
Submissions to Credit (or other Credit Risk authorised staff)	When requesting approval for a mortgage, caveat, restrictive encumbrance, Writ, notification or dealing to remain on title, a copy of the title and dealing must be provided to support review and consideration of any limitations that the dealing may impose.
¹SGB, BSA, BoM and RAMS are considered to be other external providers/other financial institutions.

2.1.1 Second Mortgage behind other financial institution (OFI)

The Westpac Bank Group prefers to be the only mortgagee on a security property. There may be some instances where we may take a second mortgage, for example, where the second mortgage is covering a shortfall in security by the primary property (e.g. Family Security Guarantee loan option).

A second mortgage may be taken to cover a shortfall of security including a guarantee where the Primary security is being taken by / or is already held with Westpac Bank Group registered as the 1^st mortgagee.

The below scenarios are excluded:

If the existing 1^st mortgage is for a reverse mortgage styled facility
The 1^st mortgagee is not a Financial institution, i.e. is a private mortgage provider. Private mortgage providers include but are not limited to an individual, a solicitor, vendor finance.
LMI applies to the proposed loan and the first mortgage is not held by Westpac Bank

Note:
SGB, BSA, BoM and RAMS are considered to be other external providers/other financial institutions.

Brokers should advise the applicant(s) that second mortgage scenarios may lead to longer settlement time frames that are outside of Westpac Bank Group's control. Delays can occur when we write to the prior mortgagee seeking consent to register the second mortgage and we ask the prior mortgagee to establish their priority amount.

For more information, refer to Loan to Value Ratio (LVR)

2.2 Assessing security collateral requirements - standard real estate

Refer to Loan to Value Ratio (LVR) policy to determine the maximum LVR and mortgage insurance availability for each security type.

The below table details additional policy rules to be applied when assessing standard real estate security collateral.

Category	Additional policy rules
Property zone	The security property must be zoned to allow residential use without restriction, irrespective of the actual zoning type (Mixed Use, Rural Residential, Rural etc.)
Completed residential dwelling (e.g. detached house)	No more than 2 dwellings on a single title More than 2 dwellings is an exception to policy. Credit may consider to a maximum of 4 dwellings on a single title as an exception, r efer to Loan to Value Ratio (LVR ) > Assessing LVR by security type. Direct vehicular access to property on appropriate all- weather surfaces for two-wheel drive vehicles The property is to have power service connected, electricity (mains or off grid system), water and waste (tank or town, sewer or septic) Minimum living floor area 40 square metres (excluding balconies and car spaces). Must contain a minimum of 1 conventional bedroom (not studio / partitioned) full living facilities including standard kitchen and bathroom facilities and direct access. The accommodation is purely standard residential catering for permanent accommodation only. Specifically, not mixed use, holiday accommodation.
Off-the-plan unit purchase	Loan funds are not available for the purchase until the property has been completed Progress payments will not be made during the construction period Must also adhere to the standard requirements of a Unit
	Full Submission criteria	Full Submission is available when: Construction will be completed within 3 months, and The valuer is able to inspect the security collateral, and The valuer 's commentary on the 'As if complete / on completion' valuation indicates they estimate construction will be complete within 3 months of the valuation completed date The 'As if complete / on completion' can be rested on when the above is met
	In Principle Approval criteria	Application must be assessed as an In Principle Approval where the 'Full Submission' criteria has not been met
Residential dwelling to be erected (e.g. licensed contract builder or owner builder) 'Residential dwelling to be erected' includes structural renovations such as additional rooms or floors and other significant changes. It excludes cosmetic changes such as internal or external painting, bathroom and kitchen renovations, pools, and landscaping.	A full valuation is required to determine the security value for to-be-erected security, construction loans or any loans requiring progress payments. Direct vehicular access to property on appropriate all- weather surfaces for two-wheel drive vehicles The property is to have power service connected, electricity (mains or off grid system), water and waste (tank or town, sewer or septic) Minimum living floor area 40 square metres (excluding balconies). Must contain a minimum of 1 conventional bedroom (not studio / partitioned) full living facilities including standard kitchen and bathroom facilities and direct access. The accommodation is purely standard residential catering for permanent accommodation only. Specifically, not mixed use, holiday accommodation. Other matters for consideration Where construction is considered to be 'unusual' for a retail proposal, the deal must be referred to Credit in the first instance for additional instructions before proceeding. 'Unusual' in this context would include the following: Construction costs of greater than $1mil More than 2 such properties adjacent to each other or in the same strata plan, or on the same title securing any consumer mortgage (progressively drawn / construction) loan More than 2 dwellings on a single title is an exception to policy. Credit may consider up to a maximum of 4 by exception, r efer to Loan to Value Ratio (LVR ) > Assessing LVR by security type. Where the construction costs equate to more than 80% of the total end value of the property Where the construction itself is of unusual design, e.g. pole house construction, mud brick, rammed earth, straw bale, log cabins or where the property will have; alternate electricity (not mains electricity or off grid system), alternate sewage (not mains sewage or septic) or alternate water source (not town water or rain water tanks). The building site requires access or ingress/egress (both during and on completion of construction) via cranes or inclinators. Refer to Construction loans.
Residential properties equal or greater than 8 ha	The primary purpose of the property is for residential occupancy No more than 2 dwellings on a single title More than 2 dwellings is an exception to policy. Credit may consider to a maximum of 4 dwellings on a single title as an exception, r efer to Loan to Value Ratio (LVR ) > Assessing LVR by security type. Direct vehicular access to property on appropriate all- weather surfaces for two-wheel drive vehicles The property is to have power service connected (mains electricity or off grid system), water (tank or town, sewer or septic) Land to be improved (i.e. have an existing dwelling, or to be erected dwelling), minimum living floor area 40 square metres (excluding balconies) and must contain a minimum of 1 conventional bedroom (not studio / partitioned) full living facilities including standard kitchen and bathroom facilities. The accommodation is purely standard residential catering for permanent accommodation only. Specifically, not mixed use, holiday accommodation A satisfactory short form valuation is required. If 'to be erected', the valuation to include confirmation that there are no restrictions against building a residential dwelling Cash flow generated from non-residential activities carried out on the residential property (such as farming) is not to be included in a serviceability assessment. Maximum land size is 50 ha
Unit	Minimum living floor area 40 square metres (excluding balconies and car spaces). The unit / development is purely standard residential catering for permanent accommodation only. Specifically, not mixed use, holiday accommodation, student accommodation. Maximum exposure no more than 4 properties in the same development or adjacent to each other owned by the same borrower group, r efer to Loan to Value Ratio (LVR ) > Assessing LVR by security type. Units must contain a minimum of 1 conventional bedroom (not studio / partitioned) full living facilities including standard kitchen and bathroom facilities Units / apartment developments in postcode Category's 5 (high density) and 6 (high risk) or any non-standard unit must be on the Security Development Register- refer to Security Development Register (SDR). Requirements as per SDR including exposure limits and max LVR requirements are adhered to
Vacant land	Land area not more than 50 ha Residential use only - not farming or commercial use Direct vehicular access to property on appropriate all weather surfaces for two-wheel drive vehicles No more than 4 such properties in the same development or adjacent to each other owned by the same borrower, r efer to Loan to Value Ratio (LVR ) > Assessing LVR by security type.

2.3 Security Development Register (SDR)

For every Unit or non-standard development you must check the Security Development Register (SDR) to see if the security development is listed.

The Bank's total exposure against completed residential dwellings is limited to a maximum of 30% of all the dwellings within the same development/complex/subdivision however Mortgage Insured exposure is restricted to 20% per development.

Checking the Security Development Register (SDR) for a listing

Category	Action
Listed security	Follow the instructions given in the register (e.g. development is not acceptable security, valuation requirement or perhaps LVR restriction).
Unlisted security	Check if the security is a unit in postcode Category 5 (High Density) or 6 (High Risk) or is in a non-standard development - refer to Assessing security collateral requirements - non-standard development . Every unit security development which is either in postcode Category 5 (High Density) or 6 (High Risk) or in a non-standard development, must be included in the SDR.
Unlisted unit not in postcode Category 5 (High Density) or 6 (High Risk), and not a non-standard development	Proceed as normal.

2.3.1 Adding a development to the SDR

Submitting an SDR assessment request to Retail Credit Risk

For guidance on what documents you must provide with your SDR referral request and the address to submit the SDR review request, refer to your Business Development Manager.

2.4 Assessing security collateral requirements - non-standard development

The Bank may accept non-standard developments as acceptable residential security collateral if the development meets the property characteristics and standard conditions in Identifying standard real estate security collateral.

All non-standard developments must be approved by Retail Credit Risk and included in the Security Development Register (SDR) prior to individual loans being formally approved for the purposes of consumer lending.

2.4.1 Non-standard development definition

A non-standard development is a development that does not fit the attributes / characteristics of a standard development. For example: hotel, serviced apartment or short stay accommodation, student accommodation.

2.4.2 Responsibilities

Party	Responsibility
Retail Credit Risk	Assess requests for a non-standard development to be included on the SDR Maintain the SDR
Broker / Assessor	Apply the SDR process-Refer to Process to follow > Security Development Register SDR.

2.4.3 Non-standard development inclusion on the SDR

For a non-standard development to be considered for inclusion on the SDR it must display the attributes below.

Refer to Loan to Value Ratio (LVR) policy to determine the maximum LVR and mortgage insurance availability for each security type.

Category	Attributes
Property type	Units must contain a minimum of 1 conventional bedroom (not studio / partitioned) full living facilities including standard kitchen and bathroom facilities Property internal living area is minimum of 40 square metres (excluding balconies and car spaces).
Occupancy	Permanent occupancy as a standard residence is permitted by the local government (that is, not just for a limited period each year).
Lease	If property is under lease, the lease agreement is less than 2 years (including options for renewal), lease can be terminated without incurring penalties & within 90 days' notice. Rental does not form part of a pooled rental income scheme or the scheme is optional.
Purchase contract	In all instance a contract of sale must allow the bank to act on its security without limitations other than leaseback arrangements (that is, right of permanent occupancy is not encumbered if there is a mortgagee sale).

2.5 Assessing security collateral requirements-general

The below table details additional policy rules to be applied when assessing security collateral.

Category	Additional requirements
Community title development Including residential subdivisions containing golf course, vineyard, resort-style facilities	No additional requirements
Company title development	A Company titled development must contain a minimum of 5 units within the development. A short form valuation in all cases for a new company title security or existing short form valuation for existing company title security collateral. Memorandum and articles of association of the company for all cases The company subclass in the ASIC search Home Unit Proprietary Company (not just Proprietary Company). Progress draw loans are not available with company title security collateral.
Conversions from other uses (industrial, commercial, hotel)	No additional requirements
Display homes	Residential short form valuation (use vacant possession value as the security value) Market rental figure in valuation to be used in serviceability test Leaseback term no greater than 2 years (including options for renewal) Lease document approved by Credit Security to be an Improved Home. Vacant land and car parks are unacceptable security collateral types
Kit home	Treated as owner builder Security value of the vacant land value and any improvement permanently attached The bank will not lend and advance any funds for purchase of the kit against value of the (unassembled) kit, or offsite construction costs. Refer to Construction loans.
Mixed residential and commercial property	No additional requirements
Over 55s developments	Must be owner occupied (not investment security) A short form valuation for new over 55s security or existing short form valuation for existing over 55s security) No suggested restrictions on re-sale Clear title obtained on the property by the purchaser The property is readily saleable on the open market The property is not part of a retirement village The property is not bound by a management agreement which restricts the ability of the owner to deal with the property
Serviced apartment	Short form valuation for all cases. Must be listed as acceptable on the SDR
Snow leases	Maximum term 20 years however the loan term cannot exceed or extend beyond the actual lease maturity date or term Principal and interest repayment only Short form valuation for a new snow lease security, (existing short form valuation for existing snow lease security). Must be listed on the SDR
Split contracts - single residential property constructions Split contracts - multi-unit residential developments	Valuation with land and improvement apportionment when determining the market value on an 'as if complete' basis The land is accessible by road and access roads have been constructed The land is serviced by water, sewerage and electricity The dwelling can be built on the land independently from other dwellings and such construction can occur at reasonable cost The development approval does not prohibit independent construction There are no restrictive covenants in relation to resale Maximum LVR available will be dependent on other features of the security being offered. Risk of split contract transaction: In all other cases the land may have no stand-alone value and cannot be taken as security due to the following risks: The purchaser may be required to enter into a building contract that will have common areas, party walls or common building foundations with other properties (i.e. a common builder is completing all dwellings and common property in the development) The land is not a saleable security. This could be for various reasons including the common property (roadways and access) have not been completed at the time of settlement; the land contract prohibits sale or transfer; there is no secondary market for the land due to size, access, restrictive covenants etc. When common property is involved (common roadways, common access ways and in particular common walls / slab) if the developer or builder ceases operation, Westpac Group will need to jointly engage with the remaining owners and financiers to complete the development. This is not an acceptable situation. Note: 0% LVR applies during the construction period Once these developments are fully complete, able to be occupied and individual titles issued, Westpac Group may accept these as security, as they would be considered readily saleable as a 'normal' house / townhouse / strata unit.
Stratum title development	Long form valuation is required in all cases
Student accommodation	Short form valuation is required in all cases. Must be listed on the SDR
Transportable homes	Progress draws where funds for the dwelling to be made on progress payment basis after the dwelling has been transported to site and services connected, (a progress inspection to confirm dwelling is on site is required prior to release of progress draw). All other progress draw loan requirements are to be met Fixed to the site with all services connected (land on which located forms part of the security and over which a mortgage is to be registered) Refer to Construction loans.

2.6 Assessing security collateral impacted by geographical or environmental issues

Refer to Loan to Value Ratio (LVR) policy to determine the maximum LVR and mortgage insurance availability for each security type.

The below table details the policy rules associated with security collateral impacted by geographical or environmental issues.

Category	Policy Rules
Flood prone areas	Full flood cover insurance Satisfactory valuer or surveyor reports
Land slip area	Residential full valuation (existing short/long form valuation for existing security) Valuer comment on land movement and the necessity for a geo-technical report. If the valuer recommends a geo-technical report, you must inform the customer of this requirement before loan approval.
Mine subsidence	Residential full valuation (existing short/long form valuation for existing security). The bank will consider proposals where the property is within a prescribed mine subsidence area subject to valuer recommending the property as an acceptable security to the bank.

2.7 Assessing security collateral by location

Some locations have restricted LVRs or mortgage insurance availability. Refer to the Loan to Value Ratio (LVR) policy and Security Collateral Value policy to determine any location specific requirements.

2.8 Assessing third party security collateral

Third party security collateral is when the Bank is offered security collateral from a person/s that is not identical to the borrower. For example:

The borrower is a company and security collateral is offered by the company directors
The security collateral is owned by two people and is offered as security for a loan for only one of those two people.

The bank does not take a third party mortgage, but takes:

A first party mortgage from all mortgagors, and

A guarantee from the mortgagors who are not borrowers. Under no circumstance is a third party security collateral to be taken without a supporting guarantee.

Third party security must also comply with Eligibility policy and Guarantee policy, to be considered acceptable security collateral

2.9 Assessing non-real estate security collateral

Refer to Loan to Value Ratio (LVR) policy to determine the maximum LVR and mortgage insurance availability for each security type.

Refer to Security Collateral Value policy to determine the market value of a term Deposit .

2.10 Assessing unacceptable security collateral

Refer to Loan to Value Ratio (LVR) policy >Unacceptable securities for further details.

2.11 Assessing specialised security collateral

Specialised securities are homes under the below unique housing schemes. Specialised security does not include non-standard developments.

National Rental Affordability Scheme (NRAS)
ACT asbestos affected homes ("Mr Fluffy")
NSW asbestos affected homes ("Mr Fluffy")
Homes for Homes (H4H)

2.11.1 Security under the National Rental Affordability Scheme (NRAS)

NRAS is a government backed incentive scheme that seeks to address the shortage of affordable rental housing by offering financial incentives to build and rent dwellings to low and moderate income households at lower levels compared to market rates.

There are two distinct NRAS structures:

Head leases
Non-entity joint ventures (NEJV)

Refer to Loan to Value Ratio (LVR) policy to determine the maximum LVR and mortgage insurance availability

NRAS type	Requirement
All NRAS (new purchase, loan increase or refinance)	NRAS properties can only be considered when the NRAS consortium is on the Bank's approved consortium list. NRAS tax incentives are excluded from serviceability assessment Maximum exposure of 25% in any NRAS individual development. Loan amount $ for $ for refinance (plus any directly related refinance costs only) with no cash out A current residential full valuation or existing shortform valuation is required. Residential full valuations undertaken in all cases under standard valuer instructions - valuers to exclude any price premium that may be attributable to NRAS When assessing the residential full valuation there will be two values listed in the valuation: A value on the Valex overview and the first page of the residential full valuation report from the valuer. A lower value in the contents of the residential full valuation report, normally under "Additional comments" and listed as the "vacant possession" value. In all cases the lower vacant possession value must be used Approval must be granted by Mortgage Credit and ALMI (in the case of a mortgage insured application) The Bank does not accept NRAS security taken via a substitution. For specific NEJV or Head Lease requirements refer to the specific NRAS structure in table below
Head Lease	NRAS consortium must be on the Approved Head Lease Consortium List The security is a completed dwelling or house and land package Construction loans are permitted for house & land packages where the Contract of Sale for the land purchase & Fixed Price Building Contract for construction are provided at the time of loan approval Vacant land purchases are unacceptable Rental income used for serviceability assessment reflects the consortium arrangement of a 25% discount on the normal market rent for the property. In the case of NRAS security not currently owned or rented, the market rental stated on rental income verification documentation is to be discounted by 25%. Rental income verification documentation is as per standard documentation policy see Verifying Income > Rental Income Where the security is being purchased: A fully completed, correctly witnessed 'NRAS Statutory Declaration of Financial and Legal Advice' has been provided by all borrowers prior to Unconditional Approval. The customer is to complete the declaration for the state in which the declaration is being made Documentation and verification requirements must be met, as per ' Headlease NRAS specific documentation and verification requirements'
Non - Entity Joint Venture (NEJV)	NRAS consortium must be on the Approved Non-Entity Joint Venture (NEJV) list NEJV NRAS specific documentation and verification requirements Rental income is accepted and verified as per standard policy refer Verifying Income policy Documentation and verification requirements must be met, as per ' NEJV- NRAS specific documentation and verification requirements'
Mortgage Insured applications	The security is a completed dwelling or House and Land package or Building Contracts are Fixed Price (where the loan is to construct an NRAS security)

2.11.1.1 Headlease -NRAS specific documentation and verification requirements

Approved Head Lease Consortiums At this time applications cannot be accepted from any other consortiums	NRAS specific documentation and verification requirements
Brisbane Housing Company (BHC)²	Headlease¹version: Brisbane Housing Company Limited template NRAS headlease - 23 November 2010 - version 1 (in the footer) Note: Legal agreements require a Head Lease to be signed between BHC and the investor.
Chief Executive Officer (Housing) - NT Government	Headlease¹version: Chief Executive Officer (Housing) - NT Government: Agreement to Lease between Landlord Probuild (NT) Pty Ltd (CAN 059 042 009) as trading for the PRO 6693 Unit Trust (ABN 45 347 431 135) and Tenant Chief Executive Officer (Housing) version dated 17/03/2014. ¹
Providence Housing Pty Ltd²	Headlease ¹ version: Providence Housing Pty Ltd template NRAS headlease version 14 Note: Legal agreements require a Head Lease to be signed between Providence and the investor
Queensland Affordable Housing Consortium (QAHC) t/as National Affordable Housing Consortium (NAHC)²	NAHC Expression of Interest (version date 111214) NAHC Confirmation Letter Both documents must be executed and the NAHC Expression of Interest must indicate the purchaser's selection of either a) Head Lease Model or b) NRAS Delivery Agreement Model (NEJV) as set out in the 'Reference Schedule' (page 2). Headlease¹version: QAHC HL 100616 or QAHC HL BC 100615
For all consortiums on this list	In all cases broker/assessor must forward the signed Head Lease¹to Credit for verification. Credit will verify that the Head Lease requirements above have been met
¹The blank headlease (where security is being purchased) or registered headlease (where security is unencumbered) ²QAHC, BHC and Providence administered NRAS security is insured under a Group insurance policy. For insurance standards - see Property insurance.

2.11.1.2 NEJV - NRAS specific documentation and verification requirements

Approved NEJV Consortiums	NRAS specific documentation and verification requirements
Queensland Affordable Housing Consortium (QAHC) t/as National Affordable Housing Consortium (NAHC)	NAHC Expression of Interest (version date 111214) NAHC Confirmation Letter Both documents must be executed and the NAHC Expression of Interest must indicate the purchaser's selection of either a) Head Lease Model or b) NRAS Delivery Agreement Model (NEJV) as set out in the 'Reference Schedule' (page 2).
United Vietnamese Buddhist Congregation of Canberra & Surrounding Districts Inc (UVBCC).	NEJV agreement (version 9) for United Vietnamese Buddhist Congregation of Canberra & Surrounding Districts Inc (UVBCC)
The below consortiums do not have NRAS specific documentation and verification requirements
Affordable Community Housing Ltd trading as Evolve Housing
Affordable Housing Consulting Pty Ltd ('AHC')
Affordable Management Corporation (AMC)
Aspire Housing Group
Australian Residential Investment Fund (Formally Questus)
Coast2Bay Housing Group Ltd
Community Housing Canberra Limited (CHC)
Crown Properties Pty Ltd
Ethan Affordable Housing
Loddon Mallee Housing Services
McKenzie Bond Pty Ltd (MB)
Mission Australia Housing Limited (MAHL)
Providence Housing Pty Ltd
Quantum Housing Group (QHG)
Tremplin Limited
Urban Affordable Housing Association (UAHA) via company structure '4 Walls Ltd'
Yaran Residential Investments Pty Ltd

2.11.2 ACT asbestos affected homes ("Mr Fluffy")

Individual owners have been written to by the ACT Government outlining a government buy back offer.

This is due to ongoing public health and safety risks posed by the continuing presence of loose fill asbestos insulation in Canberra homes. Participation in the Buyback Program is voluntary and eligible home owners must lodge an application directly with the ACT Government taskforce by Tuesday, 30 June 2015.

If the owners take up the ACT Government offer, the intent is to demolish dwellings and remove the contamination then return the previously affected blocks back to the market for resale, with former owners (shown as at Tuesday, 28 October 2014 as the offer is not transferable), having a first right of refusal to purchase the affected block (at full market value, to be determined at the time of purchase) after it is remediated. Owners will be compensated by way of the ACT Government engaging two API accredited valuers to determine a market value of the property as if it were not affected by the loose fill asbestos, in order to establish the amount to be paid as 'buy back'.

(Refer ACT Government web site for further background information. http://www.act.gov.au/asbestos-response-taskforce .)

For the security to be acceptable the following conditions must be met:

There is no current market for the sale and purchase of affected homes and therefore affected properties have a nil lending value until the ACT Government offer is made and accepted by the owners (as shown as at 28/10/14).
Only the ACT Government agreed security value is to be used as the security assessment. No other security assessment is to be relied on.
A copy of the ACT Government offer must be held as the security assessment.
Proof the ACT Government offer has been accepted by the customer must be held prior to full approval.
All Government conditions must be met e.g. customer can only be the registered owner as at 28/10/2014 as the offer is not transferable.

2.11.3 NSW asbestos affected homes ("Mr Fluffy")

In NSW, owners have two options:

a) Under Option 1, homeowners will be offered the value of the whole property (land and improvements).

b) Under Option 2, homeowners will be offered the value of the whole property minus the value of the land. For rural properties, homeowners will be offered the value of the affected premises and any building or structures on its curtilage. The curtilage is the area, usually enclosed, that encompasses the grounds and buildings immediately surrounding the premises that are used in daily domestic activities. The effect of this process is that homeowners are offered the value of the affected premises by itself.

Refer NSW Government web page for further information. http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Loose_fill_asbestos_insulation/Voluntary_purchase_and_demolition_program/Demolition_and_remediation_process.page .

a) If the customer accepts option 1.

Sale and discharge proceeds as normal.

b) If the customer accepts option 2.

1. Customer is required as part of the scheme to provide 'written confirmation from any financial institution that holds an interest over the property that acknowledges my/our intent to proceed with Option 2.' to the scheme, i.e. Customer will contact the Bank to advise they have accepted option 2.
2. Consents team will receive customer notification and will acknowledge receipt to the customer.
3. Customer will then provide signed License Agreement to the Bank
4. When the funds from the scheme are received, the loan balance and limit will be reduced to a maximum of 80% of land value in the original NSW Government offer (i.e. NSW Government agreed security value for the land).
5. For re-construction of the property, a new construction loan will be required once customer has identified a builder. All normal lending criteria applies and the new Progress Draw loan will be processed as normal.

Other information

For the security to be acceptable the following conditions must be met:

There is no current market for the sale and purchase of affected homes and therefore affected house / unit properties have a nil lending value until the building is demolished and removed.
Only the NSW Government agreed security value for the land is to be used as the security assessment. No other security assessment is to be relied on. The only exception to the acceptance of the land value is where customers wishes to purchase another property prior to receiving the purchase proceeds from the NSW Government and needs to fund all or part of the purchase price of the new property via a bridging loan from the Bank. The bridging loan should be processed with the following criteria:
Customer must show evidence that they have accepted the NSW Government offer option 2 (sale of house and land) via signed License Agreement.
The security value of the asbestos affected property is the value listed in the NSW Government offer.
A copy of the NSW Government offer must be held as the security assessment.

2.11.4 Homes for Homes (H4H)

Homes for Homes (H4H) is a social housing initiative established by The Big Issue that will generate funds by encouraging developers and home owners to pledge a small percentage of the sale proceeds of their home (approx. 0.1%).

Standard policy rules apply for H4H properties. Refer to Homes for Homes (H4H) process for specific processes.

3. Process to follow

3.1 Home for Homes (H4H)
Participation in the H4H scheme is voluntary for our customers and they can opt-out at any time. The scheme has been rolled out to all states in Australia. To facilitate this process, the owners execute a Deed of Donation with Homes for Homes who lodge a permissive caveat on the title. To register a Transfer of Ownership or Mortgage, consent from Homes for Homes will be required to be provided to the LTO with our settlement documents for lodgement.

The type of consent required by the LTO to accept the lodgement of our documents is specific to each state. To assist team members with understanding what information is required at settlement, a state based requirements matrix has been created.

Where our customer does not wish to donate, they can request the Withdrawal of Caveat from the charity, which will need to be provided at settlement if the customer would like the bank to lodge it as part of our lodgement documents.

Homes for Homes matrix
Brokers are to advise the customer to contact Homes for Homes and request the documents required as outlined in Homes for Homes Matrix. The originals or a copy of the documents are to be provided to Home Ownership Services prior to settlement.

State	Prevents	Letter of Consent requirements	Withdrawal of Caveat for paper settlement and standalone electronic lodgement process	PEXA lodgement, settlement process, and where caveat is to remain
WA	Caveat/Charge does not prevent the lodgement of any instruments as instructed by the Charity Homes for Homes	Letter of Consent is not required in WA as the Caveat does not prevent the lodgement of any instruments. This includes the Transfer of Land and the Mortgage	A paper Withdrawal of Caveat can be lodged with accompanying instruments (i.e. Transfer and/or Mortgage etc.). The paper withdrawal can be requested by our customer (for a purchase or refinance) by emailing enquiries@homesforhomes.org.au Note: an Accept Paper Lodgement form is required for paper lodgements Electronic lodgement is required for a standalone requests (i.e. no accompanying instruments to be registered). The registered proprietor as shown on title, can request the Caveat to be withdrawn by email to: enquiries@homesforhomes.org.au	A Caveat/Charge on a Western Australia title will appear on a Title Activity Check (TAC) however will not impact the PEXA lodgement. The settlement/document lodgement can proceed in PEXA as normal
VIC	Prevents the lodgement of Transfer of Land Mortgage can be registered with no Letter of Consent required (i.e. Letter of Consent is not required for a Refinance where only a mortgage is to be lodged)	The Letter of Consent is not available for Victoria. The Caveat/Charge is to be discharged from title for the lodgement of a Transfer, and will be re-lodged by the charities representative post the lodgement of the Transfer	A paper process is not available in Victoria due to the mandated use of electronic lodgement for the Withdrawal of Caveat form. A request for the caveat to be removed can be requested by our customer by email to: enquiries@homesforhomes.org.au The Homes for Homes representative will attend to the Withdrawal of Caveat via electronic lodgement Title check will need to be completed prior to settlement (or TAC in PEXA) to ensure Caveat is removed prior to completing settlement	A Home for Homes legal representative will attend the PEXA settlement to allow the settlement to take place. The vendor's representative or the lender can invite the Home for Homes legal representative into a PEXA workspace. The representative will prepare and execute a withdrawal of Caveat on behalf of Homes for Homes. Where the incoming purchaser wishes to participate in the charity, a new Caveat will be lodged post settlement Note: If the caveat is being withdrawn as part of the settlement lodgement case the caveat will appear in the TAC in PEXA
NSW	Prevents the lodgement of Transfer of Land Mortgage can be registered with no Letter of Consent required (i.e. Letter of Consent is not required for a Refinance where a only a mortgage is to be lodged)	Original Letter of Consent is required for the lodgement of a Transfer The letter can be obtained from the charity by email to: enquiries@homesforhomes.org.au	A paper Withdrawal of Caveat can be lodged with accompanying instruments (i.e. Transfer and/or Mortgage etc.). The paper withdrawal can be requested by our customer (for a purchase or refinance) by emailing enquiries@homesforhomes.org.au Note: a Rules Exemption Form is required for paper lodgements Electronic lodgement required for a standalone requests (i.e. no accompanying instruments to be registered). The registered proprietor as shown on title, can request the Caveat to be withdrawn by email to: enquiries@homesforhomes.org.au	NSW Land Registry Services require an Homes for Homes Consent letter be submitted where a transfer is involved. The original Letter of Consent can be requested at any time from the Charity and submitted as part of the transfer settlement lodgement case. Where only a Mortgage is to be lodged, a Caveat/Charge on a New South Wales title will appear on a Title Activity Check (TAC) however will not impact the PEXA lodgement. The settlement/document lodgement can proceed in PEXA as normal
SA	Caveat does not prevent the lodgement of any instruments as instructed by the Charity Homes for Homes	Letter of Consent is not required in SA as the Caveat does not prevent the lodgement of any instruments. This includes the Transfer of Land and the Mortgage	A paper Withdrawal of Caveat can be lodged with accompanying instruments (i.e. Transfer and/or Mortgage etc.). The paper withdrawal can be requested by our customer (for a purchase or refinance) by emailing enquiries@homesforhomes.org.au Electronic lodgement required for a standalone requests (i.e. no accompanying instruments to be registered). The registered proprietor as shown on title, can request the Caveat to be withdrawn by email to: enquiries@homesforhomes.org.au	A Caveat/Charge on a South Australia title will appear on a title activity check (TAC) however will not impact PEXA lodgement and settlement can proceed in PEXA as normal Where the Caveat/Charge is to be withdrawn as part of the PEXA settlement, Homes for Homes will confirm who their legal representative is, and request the lender/vendors representative to invite their representative to a PEXA Workspace to withdraw Caveat
ACT	The Caveat prevents the lodgement of Transfers without a Letter of Consent Mortgage can be registered with no Letter of Consent (i.e. Letter of Consent is not required for a Refinance where a only a mortgage is to be lodged)	An emailed copy or an original Letter of Consent is required where a Transfer is to be lodged (i.e. required for purchase settlements or change of ownership). The letter can be obtained from the charity by email to:	A paper Withdrawal of Caveat can be lodged with accompanying instruments (i.e. Transfer and/or Mortgage etc.).The paper withdrawal can be requested by our customer (for a purchase or refinance) by emailing enquiries@homesforhomes.org.au Electronic lodgement required for a standalone requests (i.e. no accompanying instruments to be registered). The registered proprietor as shown on title, can request the Caveat to be withdrawn by email to: enquiries@homesforhomes.org.au	Settlements in PEXA are not available

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	4 November 2021	Updated SDR publication 04NOV2021
3	11 November 2021	Updated SDR publication 11NOV2021
4	18 November 2021	Updated SDR publication 18NOV2021
5	25 November 2021	Updated SDR publication 25NOV2021
6	2 December 2021	Updated SDR publication 02DEC2021
7	9 December 2021	Updated SDR publication 09DEC2021
8	16 December 2021	Updated SDR publication 15DEC2021
9	23 December 2021	Updated SDR publication 23DEC2021
10	30 December 2021	Updated SDR publication 29DEC2021
11	06 January 2022	Updated SDR publication 06JAN2022
12	20 January 2022	Updated SDR publication 20JAN2022
13	31 January 2022	Updated SDR publication 27JAN2022
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Attachments

Attachment

03.02 Security Development Register.xls

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03.03 Loan to Value Ratio (LVR)

Policy ID

03.03

Policy Name

Loan to Value Ratio (LVR)

Policy Content

1. About this policy
1.1 Why this policy?
1.2 What is LVR?
2. Rules you must apply
2.1 Maximum base LVR
2.2 LVR based on multiple risk characteristics and multiple securities
2.3 Lenders Mortgage Insurance –additional requirements
2.4 LVR by borrower type and income source
2.5 LVR by product features and purpose
2.6 LVR by property value
2.7 LVR by security collateral location
2.8 LVR by security collateral type
2.9 Unacceptable security collateral
2.10 Second mortgage
2.11 LVR calculation
2.12 Debt allocation / Debt apportioning
3. Case examples
3.1 Refinance or cash out for foreign income earner
3.2 LVR for single security collateral
3.3 LVR for multiple security collateral
3.4 First and second mortgage security collateral for two residential properties

1. About this policy

1.1 Why this policy?

This policy will help you determine the maximum loan to value ratio (LVR) when assessing a loan application.

You must read this policy in conjunction with Acceptable Security Collateral policy. The Acceptable Security Collateral policy will help you identify the types of securities we accept in a consumer mortgage application.

1.2 What is LVR?

LVR is a term used to express the percentage ratio of a loan to the value of an asset or assets that provide security collateral for a loan.

The bank uses LVR to:

Assign a maximum percentage we will lend against security property offered, with or without mortgage insurance
Show the amount of lending (expressed as a percentage ratio) a customer may already have against a collateral
Identify when Lender’s Mortgage (LMI) is required

By using the assigned LVRs in this policy and the security collateral value of the property, we can determine the lending value of the offered security collateral.

For definition relating to LVR, refer to Glossary for further details.

2. Rules you must apply

2.1 Maximum base and / or capped LVR

The maximum base LVR assigned to a loan is determined by a number of risk characteristics of the application.

Based on the risk characteristics, a lower LVR threshold will override the maximum base LVR for owner-occupied and investment security detailed below.

Category	Maximum base LVR
Owner occupied	Non-mortgage insured loan: 80% Mortgage insured loan: 95% inclusive of any capitalised mortgage insurance (MI) premium (if available) Note: An Owner Occupied product should only be selected where the funds are ‘wholly or predominantly to be for personal, domestic or household use’
Investment	Non-mortgage insured loan: 80% Mortgage insured loan: 90% inclusive of any capitalised mortgage insurance premium (if available) The following is permitted where: Investment Property Loans (either standalone or combined with a home loan) with at least one security collateral being owner occupied can be considered up to 95% inclusive of any capitalised MI premium Investment Property Loans (either standalone or combined with a home loan or line of credit) with all security collateral being Non-owner occupied can be considered up to 90% inclusive of any capitalised MI premium.

Maximum base LVR

Owner occupied

Non-mortgage insured loan: 80%
Mortgage insured loan: 95% inclusive of any capitalised mortgage insurance (MI) premium (if available)

Note: An Owner Occupied product should only be selected where the funds are ‘wholly or predominantly to be for personal, domestic or household use’

Investment

Non-mortgage insured loan: 80%
Mortgage insured loan: 90% inclusive of any capitalised mortgage insurance premium (if available)

The following is permitted where:

Investment Property Loans (either standalone or combined with a home loan) with at least one security collateral being owner occupied can be considered up to 95% inclusive of any capitalised MI premium
Investment Property Loans (either standalone or combined with a home loan or line of credit) with all security collateral being Non-owner occupied can be considered up to 90% inclusive of any capitalised MI premium.

2.2 LVR based on multiple risk characteristics and multiple securities

Category	Action
Multiple risk characteristics	Apply the lowest LVR - for example: The LVR for a residential detached house is 80% and for a borrower using acceptable foreign income for serviceability the LVR is 70%. The LVR for a residential detached house is 80% and for a borrower who is a resident of Greece the LVR is 0% LVR. In this situation, we would not be able to proceed as the lowest LVR is 0%.
Multiple security collateral	Apply the relevant LVR to each type of security collateral to determine the total lending value. The sum of the lending value of each proposed security is the total amount the bank will consider lending against all securities (see Case examples in this policy).

For further information about risk characteristics refer to:

LVR by borrower type and income source
LVR by product features and purpose
LVR by property value
LVR by security collateral location
LVR by security collateral type
Unacceptable security collateral

2.3 Lenders Mortgage Insurance –additional requirements

Where lenders’ mortgage insurance (LMI) is required:

refer to Lenders Mortgage Insurance
maximum exposure to a single borrower is $2.5M across Group (Westpac, St.George, RAMS) where LMI is required

2.4 LVR by borrower type and income source

Where there are two or more applicants (borrower or income guarantor) included on the loan application, the most conservative policy must be applied regardless of their contribution to the loan, for example:
An Australian citizen who is married to a permanent resident visa holder, living in Australia and earning foreign income, will be restricted to a maximum LVR of 70%, and all policies applicable to the permanent resident visa holder applicant, will apply.
Note: Applicants who meet the Bank's definition of a non-resident as per Lending to Non-Australian Citizens policy > Non-Resident lending are unacceptable to the Bank and no lending is permitted.

Refer to Lending to Non-Australian Citizens policy for acceptable visa class and confirmation if LMI available

Borrower type	Income source	Borrower location	Non-MI – max base LVR	MI – Max base and capitalised (cap) LVR
Borrower type	Income source	Borrower location	Non-MI – max base LVR	Owner occupied	Investment
Australian citizen	AUD	Ordinarily resident in or out of Australia	80%	95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Australian citizen	Foreign²	Ordinarily resident in or out of Australia	70% (no refinance and/or cash out permitted)³	MI not available
New Zealand citizen or permanent resident visa holder	AUD	Ordinarily resident in Australia	80%	95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
	AUD	Ordinarily resident out of Australia	70% (no refinance and/or cash out permitted)³	MI not available
	Foreign²	Ordinarily resident in or out of Australia	70% (no refinance and/or cash out permitted)³	MI not available
Temporary resident visa holder	AUD	Ordinarily resident in Australia	80%	90% base LVR 90% cap LVR	90% base LVR 90% cap LVR
	AUD	Ordinarily resident out of Australia	Lending not permitted
	Foreign²	Ordinarily resident in or out of Australia	Lending not permitted
Non-residents (existing or new customers)	Lending not permitted
Legend No.	Category	Requirement
2	Foreign income	PAYG income only. No foreign self-employed income Currency must be listed on the acceptable country and currency list
3	No refinance and/or cash out permitted	Cross collateralised foreign income loans where: A customer has an existing loan; and Earns foreign income; and The current LVR is less than 70% then You may use the existing security as additional security in a purchase where the overall LVR is be up to 70% (See Case examples).

2.5 LVR by product features and purpose

Product, features and purpose		Non-MI – max base LVR	MI – max base and capitalised (cap) LVR
Product, features and purpose		Non-MI – max base LVR	Owner occupied	Investment
All products where: the application involves an existing Bridging loan (internal or external) that is not being cleared using loan funds (refinance) or customer funds prior to drawdown of new loan (non-refinance). If non-refinance must meet requirements as per Commitments policy > Mortgages being treated as an Excluded Mortgage liability.		No lending or approval (including ‘In Principle Approval’) is permitted
Bridging Loan (Interest Capitalised) (owner occupied security only) Refer to Glossary for Peak debt definition		80% based on peak debt	MI not available
Business purpose Refer to Eligibility	≤50% of the requested loan amount.	80%	90% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Business purpose Refer to Eligibility	>50% of the requested loan amount.	0%	0%	MI not available
Cash out via: New Loan Loan Increase Mortgage Insured Applications: - Cash out of greater than $100k are to be referred to Credit for consideration on a case by case basis Cash out for renovations without Progress Draws - Refer to Construction Loans > Progress Payments not required for conditions		80%	90% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Construction Loan Refer to Construction Loans	Licensed Builder - Fixed Price Contract	80%	95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
	Construction where the customer is returning to construct a new dwelling on residential property they already own and the existing mortgage loan is internal debt^#. The new borrowing may be via: New Loan Loan Increase Internal refinance ^#Internal Debt definition WBC for WBC applications STG/BoM/BSA for STG/BoM/BSA applications * Note: Only a mortgage held internally against the collateral being offered as security can be refinanced where the base LVR is greater than 90%	80%	95% base* LVR 95% cap LVR	90% base LVR 90% cap LVR
	Construction and refinance where the customer wants to construct a new dwelling on residential property they already own and the existing mortgage loan is an external debt^#. The new borrowings are via: New Loan ^#External Debt definition All lenders other than WBC for WBC applications All lenders other than STG/Bom/BSA for STG/BoM/BSA applications * Note : For the external debt refinance, a max base LVR 90% applies, using the land (plus any existing retained improvements, where applicable e.g. shed, pool) value. Brokers must complete a manual calculation to ensure base LVR will not be exceeded when the funds are released for the refinance. The total (external refinance plus new construction) max base LVR is then determined using the ‘on completion’ valuation figure	80%	95% base* LVR 95% cap LVR	90% base* LVR 90% cap LVR
	Licensed Builder - Cost Plus Contract	70%	MI not available
	Owner builder (Not permitted for foreign income or foreign employment)	60%	MI not available
Equity access loan (not available for new lending)		80%	90% base LVR 90% cap LVR	90% base LVR 90% cap LVR
Guarantee Loan Refer to Guarantees	LVR against the guarantor’s security collateral	80%	MI not available for any of the security collateral guarantee types, being: Spousal-Security Guarantee Spousal-Income + Security Guarantee (WBC only) Family-Security Guarantee Shared Equity Guarantee
Guarantee Loan Refer to Guarantees	LVR against the guarantee limit/amount ($) for: Family-Security Guarantee, and Shared Equity Guarantee (This restriction applies as the guarantee can be less than the full amount of the loan)	80%
Increase for further loan E.g. customer purchases a second property and uses both the existing property (with existing debt) and the new property as security collateral.		80%	90% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Interest Only in Advance (IOA) repayment term		80%	MI not available
Interest only (IO) repayment term (Exceptions apply refer LVR by product features and purpose - additional requirements)⁵ If IOA, refer to ‘Interest Only in Advance (IOA) repayment term’	Where product is a Home loan * *available for internal and external refinance	80%	80% base LVR 80% cap LVR	80% base LVR 80% cap LVR
	Where product is an Investment Property Loan or Equity Access Loan	80%	90% base LVR 90% cap LVR	90% base LVR 90% cap LVR
Parental leave – use of ‘return to work’ income New Loan, or Increase Where the loan will be advanced and the first repayment is due before the applicant’s return to work date, refer Serviceability Assessment > Parental leave use of ‘return to work’ income		80%	90% base LVR 90% cap LVR Credit referral required. Considered on a case-by-case basis	MI not available
Refinance of existing debt including debt consolidation via New Loan Loan Increase Note: For a refinance of external mortgage where the new product is a ‘home loan’ with ‘interest only (IO) repayment type refer to LVR by product features and purpose > Interest only (IO) repayment term > where product is a home loan		80%	90% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Legend No.	Category	Requirement
5	Interest only (IO) repayments in certain scenarios (these are exception scenarios to 'Interest only (IO) repayment term' listed above)	Maximum Base LVRs may be considered in the following: During progress draw phase of a construction loan where the end loan will be on a P&I basis, refer to LVR by product, features and purpose > Construction Loans

2.6 LVR by property value

Property location	Property value	Non MI – max base LVR	MI – max base and capitalised (cap) LVR
Property location	Property value	Non MI – max base LVR	Owner occupied	Investment
All locations (single property)	≤ $2.5m	80%¹	Applications may be referred up to a maximum base loan amount or total Westpac Group exposure of $2.5m LMI is determined on a case by case
Australian Capital Territory Northern Territory Queensland South Australia Tasmania Western Australia	> $2.5m and ≤ $3.5m	70% - 80% up to a maximum loan size of $2.45m
	> $3.5m (prestige property)	70%
New South Wales Victoria	> $2.5m and ≤ $5.0m	70% - 80% up to a maximum loan size of $3.5m
New South Wales Victoria	> $5m (prestige property)	70%

¹In some instances, the maximum LVR offered will be higher than 80% under an eligible LMI waiver special package

2.7 LVR by security collateral location

Security collateral location		Non MI – max base LVR	MI – max base and capitalised (cap) LVR
Security collateral location		Non MI – max base LVR	Owner occupied	Investment
Concentration risk postcodes	0880, 0881, 4717, 4718, 4742, 4744, 4745, 4746, 4803, 4804, 4854, 4874, 5725, 6348, 6390, 6429, 6442, 6714, 6720, 6721, 6722, 6751, 6753, 6798	70%	MI not available
Island postcodes not connected by a road bridge to the mainland	The below are known postcodes for island locations not connected by a road bridge. This postcode list is not definitive. In some cases a mainland and island location may share the same postcode. Brokers must manually check if the security location is also an island location not connected by a bridge and apply the correct LVR. 2898, 4025, 4183, 4184, 4803, 4819, 5220, 5221, 5222, 5223, 6798, 7255, 7256 Refer below for 2899 (Norfolk Island), 5223 (Kingscote), 6799 (Cocos Island)	70%	MI not available
		Above 70% to max 80% for owner occupied home loan only	MI not available
	2899 (Norfolk Island) security for: New loans Loan Increases Variation activities requiring re-origination	Lending not permitted
	2899 (Norfolk Island) security for variation activities: Involving loans with an existing Norfolk Island security where: The variation activity does not require re-origination	70%	MI not available
		Above 70% to max 80% for owner occupied home loan only	MI not available
	Special condition 5223 Kingscote (for Bank SA branch at that location only)	80% owner occupied	90% base LVR 90% cap LVR	MI not available
	Special condition: 6799 Cocos Island	Lending not permitted
Mortgage Insured loan referrals	4207, 4208, 4210, 4211, 4556, 4680, 4700, 4737, 4825, 4869, 6208, 6225, 6430, 6714, 6721 and 6722	80%	Refer MI applications to Credit on a case by case basis where LVR > 90%, if acceptable max: 95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
		80%		90% base LVR 90% cap LVR
	2835, 4209, 4413, 4720, 4721, 6167, 6168, 6169, 6170, 6171, 6172, 6173, 6174, 6175, 6176, 6180, 6181, 6207, 6208, 6209, 6210, 6713	80%	Refer MI application to Credit for consideration on a case by case basis, if acceptable max: 95% base LVR 95% cap LVR	Refer MI application to Credit for consideration on a case by case basis, if acceptable max: 90% base LVR 90% cap LVR
		80%
	Cat 7 – Locations Refer to Security Collateral Value > Postcode Categories	80%	Refer MI applications to Credit for consideration on a case by case basis where LVR > 90%, if acceptable max: 95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
		80%
Vacant land	≤8 ha in postcode Category 1 & 2 Refer to Security Collateral Value > Postcode Categories	80%	95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Vacant land	≤8 ha in postcode Category 3 & 7 Refer to Security Collateral Value > Postcode Categories	80%	90% base LVR 95% cap LVR	90% base LVR 90% cap LVR

2.8 LVR by security collateral type

For additional information about security collateral type refer to Acceptable security collateral > Rules > Assessing security collateral requirements – Non-Standard Development.

Security type		Non-MI – max base LVR	MI – max base and capitalised (cap) LVR
Security type		Non-MI – max base LVR	Owner occupied	Investment
Company title		80%	MI not available
Conversions to residential from other usage where permanent occupancy is allowed: Commercial offices Warehouse and industrial		70%	MI not available
Converted hotels / motels		70%	MI not available
House (Detached) on residential land >8ha but ≤50ha		80%	Applications referred to Credit for consideration on a case by case basis
Display homes		80%	MI not available
Kit homes Refer to Construction Loans		60%	MI not available
Leasehold property located in the NSW and Victorian snowfields		60%	MI not available
Mixed residential and commercial		60%	MI not available
Moiety title		70%	Refer MI applications to Credit for consideration on a case by case basis
Multiple dwellings on one title	2 standard separate residential dwellings	80%	Refer MI application to Credit for consideration on a case by case basis, if acceptable max: 95% base LVR 95% cap LVR	Refer MI application to Credit for consideration on a case by case basis, if acceptable max: 90% base LVR 90% cap LVR
	3 standard separate residential dwellings	Must be referred to Credit for consideration on a case by case basis Listed LVR indicative only 70% LVR Higher or lower LVR's may be applied at Credit's discretion	MI not available
	4 standard separate residential dwellings	Must be referred to Credit on a case by case basis for consideration on a case by case basis Listed LVR indicative only 60% LVR Higher or lower LVR's may be applied at Credit's discretion	MI not available
National Rental Affordability Scheme (NRAS)	Non-entity joint venture (NEJV)	80%	Not applicable to NRAS	90% base LVR 90% cap LVR
National Rental Affordability Scheme (NRAS)	Head lease arrangement	70%	Not applicable to NRAS	85% base LVR 90% cap LVR
Over 55s developments		70%	MI not available
Second mortgage LVR based on combined 1st and 2nd mortgage loan amounts plus 20% buffer		80%	MI not available
Serviced apartment where permanent occupancy is permitted		70%	MI not available
Split contract: Single residential property constructions Multi-unit residential development		0% during construction period if the land does not display all acceptable characteristics. Refer to Acceptable security collateral > Rules > Assessing security collateral requirements – Non-Standard Development.
Stratum title		80%	MI not available
Student accommodation Where permanent occupancy is allowed		70%	MI not available
Term Deposit When used as Guarantee security collateral. Refer Guarantees > Policy rules per acceptable guarantee type		100%	MI not available
Transportable homes Refer to Construction Loans		80%	MI not available
Unit	Within Category 5 (High Density) or Category 6 (High Risk) postcode location No matter the size of the unit. Refer to Security Collateral Value > Postcode Categories	80%	Maximum Base LVR: 90% subject to check of the Security Development Register (SDR) for a possible lower LVR. Refer Acceptable security collateral > Process to follow>Security development register Note: The SDR shows maximum LVR including capitalised mortgage insurance premium. Maximum Capitalised LVR: 95% Note: Any request for a pre cap or capitalised LVR >90% is by exception and must be referred to Credit for consideration on a case by case basis
Unit	Living area ≥40sqm Units must contain full living facilities including kitchen and bathroom facilities.	80%	95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
Vacant land	≤8 ha in postcode Category 1 & 2 Refer to Security Collateral Value > Postcode Categories	80%	95% base LVR 95% cap LVR	90% base LVR 90% cap LVR
	≤8 ha in postcode Category 3 and 7 Refer to Security Collateral Value > Postcode Categories	80%	90% base LVR 95% cap LVR	90% base LVR 90% cap LVR
	>8 ha but ≤50 ha	80%	Refer MI application to Credit for consideration on a case by case basis, if acceptable max: 90% base LVR 95% cap LVR	Refer MI application to Credit for consideration on a case by case basis, if acceptable max: 90% base LVR 90% cap LVR
	>8 ha but ≤50 ha	80%

2.9 Unacceptable security collateral

Refer to Glossary for definition of security type.

Category	LVR
ACT and NSW asbestos-affected homes (Mr Fluffy)	0%
Aged care facility	0%
Boarding houses	0%
Commercial property (all)	0%
Converted motel units where permanent occupancy is not allowed	0%
Hotels, motels, holiday resort style development, ski resort, sub lease ownership structure within a tourist / holiday location	0%
Industrial property (all)	0%
Investment property security involving third-party financing (customers providing housing finance to third parties – business purpose)	0%
Living area < 40 square metres	0%
Managed apartments with on sale covenants	0%
More than four properties on one title.	0%
National Rental Affordability Scheme (NRAS) security and government Rental Guarantee security that does not meet the residential security requirements.	0%
Non-specialised commercial and industrial	0%
Portable dwellings	0%
Purple Title (WA)	0%
Residential property converted for commercial use	0%
Resort and hotel units where permanent occupancy is not allowed	0%
Retirement village accommodation	0%
Residential >50 hectares (with or without a dwelling)	0%
Rural vacant land of any size (e.g. farm land)	0%
Rural properties which contain water allocation rights or licence	0%
Rural properties (all other)	0%
Security collateral located outside Australia	0%
Shares and debenture stock	0%
Timeshare property	0%
Unconventional building materials (e.g. mud brick, rammed earth, straw bail)	0%
Log cabins	0%
Unsupported guarantee	0%

2.10 Second mortgage

The bank takes a second mortgage over a security property, where there is a prior mortgagee (e.g. where the first mortgage is held by another financial institution).

STG, BSA, BoM and RAMS are considered to be other financial institutions.

Mortgage insurance is not available where a second mortgage applies.

For more information about assessing the second mortgage applications you may also refer to Acceptable Security Collateral > Certificate of title > Second Mortgage behind other financial institution (OFI)

Second mortgage lending value calculation and priority amount conditions
Category	Action
Calculation	A 20% buffer for contingencies is to be used in the calculation of the Lending value. a. Determine the lending value of the offered security property (using the security value and assigned LVR) b. Identify the value of the debts secured by the first mortgage with the other external financial institution (higher of limits or outstanding balance of loan) c. Multiply figure at b by 120% d. Remaining available lending value = a – c refer to Example for illustration.
Priority amount -Special condition for settlement	Write to the prior mortgagee seeking consent requesting that the prior mortgagee establish their priority amount. The priority amount must be no more than the amount initially used to calculate the lending value for our loan (i.e. higher of the limit or balance outstanding plus 20%). If this occurs, you must seek additional approvals from Credit.

2.11 LVR calculation

Calculating the LVR and security value
Category	Detail
LVR Calculation	The Loan to Value Ratio (LVR) is calculated and expressed as a percentage by dividing the loan amount (new debt + existing remaining debt) by the total Security Collateral Value (refer Security Collateral Value Assessment and ‘Security Value’ below) Exception: The LVR for Bridging (Relocation) loans is calculated on Peak Debt Refer to Glossary for Peak debt definition
Security value	Scenario	Security Value
	For security collateral being purchased (has a purchase/contract price):	The valuation amount where the below applies: Favourable purchase (preferential purchase/transfer price) for sales between family members, or Favourable purchase (preferential purchase/transfer price) other than between family members. Subject to acceptance by Credit, or Off the Plan Purchase with a Contract date greater than 12 months old If the above does not apply, then The purchase price/contract price as validated by AVM or Desktop (if AVM or Desktop permitted by policy -refer to Security Collateral Value Assessment), or The lower of: The purchase price/contract price and The valuation amount (if policy requires or permits a valuation refer to Security Collateral Value Assessment)
	For security collateral not being purchased (i.e. security collateral is already held by the customer/has no purchase/contract price)	The customer’s estimated security collateral value as validated by AVM or Desktop (if AVM or Desktop permitted by policy -refer to Security Collateral Value Assessment), or The valuation amount (if policy requires or permits a valuation refer to Security Collateral Value Assessment)
	For security collateral which is a ‘ Family-Security Guarantee’ or a 'Shared Equity Guarantee'	The guarantee limit/amount ($) where the security collateral is a ‘Family-Security Guarantee’ or 'Shared Equity Guarantee'
	Licensed Builder -construction loans (and House/Land packages) where: Contract is for full property construction and land purchase	The Construction Valuation ‘Market Value’ where the below applies: Favourable purchase (preferential purchase/transfer price) for sales between family members, or Favourable purchase (preferential purchase/transfer price) other than between family members. Subject to acceptance by Credit If the above does not apply, then The lower of: The Construction Valuation ‘Market Value’ valuation amount and Contract amount
	Licensed Builder -construction loans (includes Kit homes) where: Contract is for full property construction and the land is already owned	The Construction Valuation ‘Market Value’ where the below applies: Favourable purchase (preferential purchase/transfer price) for sales between family members, or Favourable purchase (preferential purchase/transfer price) other than between family members. Subject to acceptance by Credit If the above does not apply, then The ‘Land Value’ from Construction Valuation, plus The lower of: ‘Improvements’ from the Construction Valuation and Build Contract amount plus any additional quotes detailed within the Construction Valuation
	Owner Builder-Construction loans (includes Kit homes) for: Contract is for full property construction and land purchase	The Construction Valuation ‘Market Value’ where the below applies: Favourable purchase (preferential purchase/transfer price) for sales between family members, or Favourable purchase (preferential purchase/transfer price) other than between family members. Subject to acceptance by Credit If the above does not apply, then The lower of: The Construction Valuation ‘Market Value’ valuation amount, and The Independent Advisor’s Report plus Land Contract amount
	Owner Builder-Construction loans (includes Kit homes) for: Contract is for full property construction and the land is already owned	The Construction Valuation ‘Market Value’ where the below applies: Favourable purchase (preferential purchase/transfer price) for sales between family members, or Favourable purchase (preferential purchase/transfer price) other than between family members. Subject to acceptance by Credit If the above does not apply, then The ‘Land Value’ from Construction Valuation plus The lower of: ‘Improvements’ from the Construction Valuation’ and The Independent Advisor’s Report
	Renovations/improvements/additions requiring a Construction valuation	Construction Valuation ‘Market Value’ valuation amount
	Transportable Homes	As per Licensed Builder – Construction loans above
	Multiple Dwellings-Construction loans

2.12 Debt allocation / Debt apportioning

Debt allocation may be required when assessing a loan application (new origination or variation) where the borrower:

Has an existing debt secured by two or more properties and the existing debt is not being refinanced (either partially or in full), and
Not all properties securing the existing debt will be used as security collateral in the new loan.

Note: Debt allocation is not required where all the security collateral properties for the existing debt, are being offered as security collateral for the new loan origination or variation.

The following debt allocation principles apply:

For properties offered as security collateral on the new loan, the market value from an existing acceptable valuation (where applicable) or new valuation, is the market value used in the new loan application
Where a property is not being used as security collateral for the new loan but will remain a security collateral for an existing debt, it is shown as an asset property in the new loan application. The value of the asset property entered will be the market value from an existing valuation where it is acceptable to be re-used, or a new valuation (where the existing valuation cannot be re-used), refer Security Collateral Value Assessment > Re-using an Existing Valuation.
Where two or more new loans are proceeding at the same:
- Under a single submission, each new loan must mirror each other, i.e. all new loans must reflect the other new loan(s), regardless of whether or not the new loans will settle / draw down simultaneously, or
- In concurrent submissions and:
  - Settling simultaneously, then each concurrent loan must mirror each other.
  - Not settling simultaneously (i.e. waterfall), application supporting notes must identify the order in which the loans will settle / draw down and each new loan must be reflected in any subsequent concurrent application.
The maximum permitted non-LMI LVR is applied to each security collateral and asset property, which may include a higher LVR policy where LMI is waived (e.g. Medico 90%), refer to rules in this chapter. Noting however, that lower LVR thresholds may apply according to borrower type and income source, product features and purpose, property value, security location and type e.g. where foreign income is included in servicing a max LVR 70% applies to all security collateral(s) and existing asset property(s).
Debt allocation can only be applied between properties owned by the borrower(s)

Debt allocation cannot be applied where:

The security collateral is partially or fully owned by a non-borrower, e.g. where a family security guarantee supports an existing debt.
Any of the existing security collateral are under construction, until such time as the loan has been fully advanced and the construction is complete. This includes where an existing construction loan has multiple security collateral.
An application is Mortgage insured, unless all insured security collateral are linked to the new loan. Where this occurs, the LMI premium will be calculated on the TSE and will require referral to Mortgage Insurer for a manual premium calculation

3. Case examples

3.1 Refinance or cash out for foreign income earner

Category	Examples
Acceptable	It is acceptable where an existing customer is going to cross collateralise the security/loans and there is no cash out to the customer, only additional funds for the purchase settlement.
Not acceptable	It is not acceptable where an existing customer wants to access equity to assist with a new purchase, but is not cross collateralising the security, i.e. each transaction will be standalone. The release of equity is classified as cash out and not permitted. The new loan for the purchase may proceed at LVR 70% but no additional equity release against the existing property is possible. It does not matter if the proposed new loan is with Westpac or external financier.

3.2 LVR for single security collateral

Category	Security value	LVR (principle and interest loan)		Lending value
Category	Security value	Non-MI – max base LVR	MI - max base LVR	Non-mortgage insured	Mortgage insured
Owner-occupied detached house	$350,000	80%	95%	$280,000	$332,500

3.3 LVR for multiple security collateral

Category	Security collateral value	LVR (principle and interest loan)		Lending value
Category	Security collateral value	Non-MI – max base LVR	MI - max base LVR	Non-mortgage insured	Mortgage insured
Residential real estate < 8 ha – owner occupied	$250,000	80%	95%	$200,000	$237,500
Company title	$250,000	80%	85%	$200,000	$212,500
Serviced apartment floor size > 40sqm	$150,000	70%	Not available	$105,000	Not available
Residential real estate >8 ha but <= 50 ha (non-income producing)	$100,000	80%	Not available	$80,000	Not available
Totals without MI				$585,000
Totals with MI					Unable to proceed as a cross collateralised transaction with mortgage insurance due to unacceptable security collateral

3.4 First and second mortgage security collateral for two residential properties

Category	Estimated security value	LVR	Available loan amount
Property A: First mortgage with us	$350,000	80%	$280,000
Property B: Second mortgage with us and first mortgage with NAB	$350,000	80%	$280,000
Less $150,000 (NAB mortgage Property B) Plus $30,000 buffer ($150,000 x 20%)			($180,000)
Sub Total			$100,000
Total Maximum Lending Value			$380,000

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	20 February 2022	Updated ‘LVR by security location’ to specify the below for 2899 Norfolk Island: For new loans, loan increases and variation activities requiring re-origination= Lending not permitted For variations on loans with existing Norfolk Island security, where the variation activity does not require re-origination = Non MI max base LVR 70% or above 70% to max 80% for owner occupied home only, and MI not available
3	3 April 2022	Change 1 Under section ‘ LVR by product features and purpose’: Added LVR rules for Interest in Only in Advance (IOA): 80% max base non-MI LVR, and MI not available Change 2 New content added 2.7 LVR by security collateral location > Island postcodes not connected by a road bridge to the mainland: Special condition for Kingscote (for Bank SA branch at that location only). Non MI – max base LVR 80% owner occupied MI Owner occupied - max base LVR 90%, max cap LVR 90% MI Investment – MI not available Change 3 Updated section ‘2.4 LVR by borrower type and income source’ to clarify existing policy (no change to policy or risk appetite): Australian citizen ordinarily residing in or out of Australia earning AUD: 80% base LVR with no LMI 95% base or cap LVR with LMI (owner occupied) 90% base or cap LVR with LMI (investment) NZ citizen or permanent resident visa holder with AUD income and ordinarily resident in Australia: 80% base LVR with no LMI 95% base or cap LVR with LMI (owner occupied) 90% base or cap LVR with LMI (investment) Link to Migrant Lending policy moved from legend item #3 to above the table Change 4 Updated section ‘ 2.4 LVR by borrower type and income source’: Deleted the below from footnote #3 for ‘Permanent and temporary resident’. Change made as credit referral for LMI approval is no longer required for the below scenarios^: For a permanent resident, mortgage insured loans where LVR >90% will refer to Credit for LMI approval (DUA2) For a temporary resident, mortgage insured loans will refer to Credit for consideration before seeking LMI approval (DUA4)
4	22 May 2022	Change 1. Updated: Section ‘LVR by Product, Features, Purpose’ to: Specify that MI not available in OBP for ‘Shared Equity Guarantee’ type Include 80% max non LMI base LVR against the Guarantee Limit/Amount for the ‘Shared Equity Guarantee’ type Specify that for all products, if the application involves an existing Bridging loan (internal or external) that is not being cleared (using loan funds or customer funds), no lending or approval (including ‘In Principle Approval’ is permitted Section ‘LVR’ calculation to specify that the security value is the guarantee limit/amount ($) where the security collateral is a ‘Shared Equity Guarantee’ Change 2. Policy Clarification Removal of reference to HomeBuilder Grant (as this initiative has been withdrawn by the government) Updated wording to Cash Out Updated wording for Refinance of Existing debt Updated wording for return borrowing for construction internal and external existing debt
5	27 May 2022	Bridging Loan aligned to legacy policy
6	17 July 2022	Change 1 Updated section ‘LVR Calculation’ to include reference to Bridging loans: Exception: The LVR for Bridging (Relocation) loans is calculated on Peak Debt Change 2 Update to the below scenarios in 2.5 LVR by product features and purpose OLD Interest only (IO) repayment term where product is a Home loan (Exceptions apply refer LVR by product features and purpose - additional requirements) ⁵ If IOA, refer to 'Interest Only in Advance (IOA) repayment term' NEW Interest only (IO) repayment term where product is a Home loan* available for internal and external refinance (Exceptions apply refer LVR by product features and purpose - additional requirements) ⁵ If IOA, refer to 'Interest Only in Advance (IOA) repayment term' Change 3* Update to LVR by Product features and purpose Old Refinance of existing debt including debt consolidation via New Loan Loan Increase New Refinance of existing debt including debt consolidation via New Loan Loan Increase Note: For a refinance of external mortgage where the new product is a ‘home loan’ with ‘interest only (IO) repayment type refer to LVR by product features and purpose > Interest only (IO) repayment term > where product is a home loan Change 4 The below scenarios have been deleted from 2.5 LVR by product features and purpose *Westpac Brand* Refinance of external mortgage loan where: the new loan with Westpac will be owner occupied on an IO repayment basis and no other mortgage loan held with Westpac or being refinanced to Westpac. Note: 'external mortgage loan' includes STG/BoM/BSA and RAMS. *Westpac Brand* Refinance of external mortgage loan where: the new loan with Westpac will be owner occupied on an IO repayment basis either at least one other mortgage loan is already held with Westpac or at least one other mortgage loan which is not owner occupied on an IO repayment basis will be refinanced to Westpac at the same time. Note: 'external mortgage loan' includes STG/BoM/BSA and RAMS.
7	26 July 2022	Change 1 Updated Section ‘LVR by Product, Features, Purpose’ to: Specify that for all products, if the application involves an existing Bridging loan (internal or external) that is not being cleared using loan funds (refinance) or customer funds prior to drawdown of new loan (non-refinance), no lending or approval (including ‘In Principle Approval’) is permitted. If non-refinance must meet requirements as per Commitments policy > Mortgages being treated as an Excluded Mortgage liability. Reflect a change to the max LVR for Bridging Loans as follows and to add a hyperlink to Glossary for definition of peak debt: From 75% on loan principal amount (not the capitalised amount) To 80% based on peak debt
8	2 October 2022	Update to content in section 2.4 LVR by borrower type and income source Old wording Refer to Migrant Lending policy for acceptable visa class and confirmation if LMI available New wording Refer to Lending to Non-Australian Citizens policy for acceptable visa class and confirmation if LMI available
9	20 November 2022	Change 1 Updated section ‘LVR by product features and purpose’ to reflect that cash out is not available for construction where progress payments are not required. Old wording Cash out for construction or renovations without Progress Draws: Refer to Construction Loans > Progress Payments not required for conditions New wording Cash out for renovations without Progress Draws: Refer to Construction Loans > Progress Payments not required for conditions Change 2 Section Debt Allocation / Debt Apportioning updated as follows: Old wording: Debt allocation enables us to: identify which property/ies secure an existing debt, and calculate the available equity against the property/ies as required Warning: Debt allocation is not available for mortgage insured applications unless all insured security collateral is linked to the new loan. Where this occurs the LMI premium will be calculated on the TSE and will require referral to Mortgage Insurer for a manual premium calculation New wording: Debt allocation may be required when assessing a loan application (new origination or variation) where the borrower: Has an existing debt secured by two or more properties and the existing debt is not being refinanced (either partially or in full), and Not all properties securing the existing debt will be used as security collateral in the new loan. Note: Debt allocation is not required where all the security collateral properties for the existing debt, are being offered as security collateral for the new loan origination or variation. The following debt allocation principles apply: For properties offered as security collateral on the new loan, the market value from an existing acceptable valuation (where applicable) or new valuation, is the market value used in the new loan application Where a property is not being used as security collateral for the new loan but will remain a security collateral for an existing debt, it is shown as an asset property in the new loan application. The value of the asset property entered will be the market value from an existing valuation where it is acceptable to be re-used, or a new valuation (where the existing valuation cannot be re-used), refer Security Collateral Value Assessment > Re-using an Existing Valuation. Where two or more new loans are proceeding at the same: Under a single submission, each new loan must mirror each other, i.e. all new loans must reflect the other new loan(s), regardless of whether or not the new loans will settle / draw down simultaneously, or In concurrent submissions and: Settling simultaneously, then each concurrent loan must mirror each other. Not settling simultaneously (i.e. waterfall), application supporting notes must identify the order in which the loans will settle / draw down and each new loan must be reflected in any subsequent concurrent application. The maximum permitted non-LMI LVR is applied to each security collateral and asset property, which may include a higher LVR policy where LMI is waived (e.g. Medico 90%), refer to rules in this chapter. Noting however, that lower LVR thresholds may apply according to borrower type and income source, product features and purpose, property value, security location and type e.g. where foreign income is included in servicing a max LVR 70% applies to all security collateral(s) and existing asset property(s). Debt allocation can only be applied between properties owned by the borrower(s) Debt allocation cannot be applied where: The security collateral is partially or fully owned by a non-borrower, e.g. where a family security guarantee supports an existing debt. Any of the existing security collateral are under construction, until such time as the loan has been fully advanced and the construction is complete. This includes where an existing construction loan has multiple security collateral. An application is Mortgage insured, unless all insured security collateral are linked to the new loan. Where this occurs, the LMI premium will be calculated on the TSE and will require referral to Mortgage Insurer for a manual premium calculation Change 3 Updated section LVR by product, features and purpose to: Include max LVR’s where Parental leave use of ‘return to work’ income is used in serviceability Update wording for return borrowing for construction internal and external debt Reduce base LVR to 90% for construction with an external refinance and added following policy clarification: *Note: For the external debt refinance, a max base LVR 90% applies, using the land (plus any existing retained improvements, where applicable e.g. shed, pool) value. Brokers must complete a manual calculation to ensure base LVR will not be exceeded when the funds are released for the refinance. The total (external refinance plus new construction) max base LVR is then determined using the ‘on completion’ valuation figure
10	19 February 2023	Change 1 Minor wording update to content in section 2.7 LVR by security collateral location Scenario > Mortgage insured loan referrals postcodes > 4208, 4208 etc Old wording For LVR > 90% Applications referred to Credit for consideration New wording Refer MI applications to Credit on a case by case basis where LVR > 90%, if acceptable max: Scenario > Mortgage insured loan referrals postcodes > 2835,4209, 4413 etc Old wording For LVR > 80% Applications referred to Credit for consideration New wording Refer MI application to Credit for consideration on a case by case basis if acceptable max: Scenario > Mortgage insured loan referrals postcodes > Cat 7 location Old wording For LVR > 90% applications referred to Credit for consideration New wording Refer MI applications to Credit for consideration on a case by case basis where LVR > 90%, if acceptable max: Change 2 Minor wording update to content in section 2.8 LVR by security collateral type > Security type: Scenario > House (detached) on residential land > 8ha but < 50ha Old wording Applications referred to Credit for consideration New wording Applications referred to Credit for consideration on a case by case basis Scenario > Moiety title Old wording Refer MI applications referred to Credit New wording Refer MI applications to Credit for consideration on a case by case basis Scenario > Multiple dwellings on one title > 2 standard separate residential dwellings Old wording Refer MI application to Credit on a case by case basis, if acceptable: New wording Refer MI application to Credit for consideration on a case by case basis, if acceptable max: Scenario > Multiple dwellings on one title > 3 standards separate residential dwellings Old wording Must be referred to Credit on a case by case basis New wording Must be referred to Credit for consideration on a case by case basis Scenario > Multiple dwellings on one title > 4 standard separate residential dwellings Old wording Must be referred to Credit for consideration New wording Must be referred to Credit for consideration on a case by case basis Scenario > Unit > Within Cat 5 or Cat 6 postcode location Old wording Note: Any request for a pre cap or capitalised LVR > 90% is by exception and must be referred to credit New wording Note: Any request for a pre cap or capitalised LVR > 90% is by exception and must be referred to Credit for consideration on a case by case basis Scenario > Vacant land > 8ha but < 50 ha Old wording Applications referred to Credit for consideration New wording Refer MI application to Credit for consideration on a case by case basis, if acceptable max:
11	26 March 2023	Change 1 Section 2.4 ‘LVR by borrower type and income source’ updated to include the following content which has been moved from Verifying Income > Foreign income and employment: New wording: Where there are two or more applicants (borrower or income guarantor) included on the loan application, the most conservative policy must be applied regardless of their contribution to the loan, for example: An Australian citizen who is married to a permanent resident visa holder, living in Australia and earning foreign income, will be restricted to a maximum LVR of 70%, and all policies applicable to the permanent resident visa holder applicant, will apply. Note: Applicants who meet the Bank's definition of a non-resident as per Lending to Non-Australian Citizens policy > Non-Resident lending are unacceptable to the Bank and no lending is permitted. Change 2 Updated section ‘LVR by product features and purpose’ (clarification only change): Updated ‘Owner Builder’ to clarify that owner builder is not permitted for foreign income or foreign employment. Wording previously only referred to ‘not permitted for foreign income’.
12	2 July 2023	Change 1 Add “Purple Title (WA)” to unacceptable security collateral

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03.04 Security Collateral Value Assessment

Policy ID

03.04

Policy Name

Security Collateral Value Assessment

Policy Content

1. About this policy
1.1 Why this policy
1.2 Security collateral value - Market Value
1.3 What are acceptable real estate valuation methods?
2. Rules you must apply
2.1 Customer estimated market value
2.2 Assessing security collateral value using valuation report
2.3 Requesting a Valuation Report
2.4 Ownership of Valuation Report
2.5 Reading the Valuation Report
2.6 Risk Rating in Valuation Report
2.7 More than one market value
2.8 Contract of Sales (Purchase Price)
2.8.1 Requirements to obtain a COS
2.8.2 Review of COS
2.8.3 Minimum criteria to be obtained from the Contract of Sale
2.9 Chattels, Rebates and Incentives
2.9.1 Chattels
2.10 Automated Valuation Model (AVM)
2.11 Valuation amount lower than purchase price
2.12 Re-using an Existing Valuation
2.13 Postcode Categories
2.13.1 Postcode Category by States / Territory
2.13.2 Disaster Postcodes
2.13.3 Concentration Risk Postcodes
2.13.4 Island postcodes not connected by a road bridge to the mainland
2.14 Assessing non-real estate security collateral value
2.15 Valuation Review
3. Process to follow
3.1 Desktop Valuation
3.2 Residential Short Form Valuation
3.2.1 Reviewing and actioning a Residential Short Form Valuation
3.3 Reviewing and actioning a Residential Long Form Valuation
3.4 Valuation Review

1. About this policy

1.1 Why this policy

This policy lists the rules you must apply when assessing residential security collateral risk for consumer mortgage lending.

Note: N on-specialised commercial security collateral may be considered on an exception basis when approved by Credit.

The bank performs several validation checks in our origination system. These additional checks form part of the overall valuation strategy and policy.

Refer to this policy in conjunction with Acceptable Security Collateral and Loan to Value Ratio (LVR) > Calculating the LVR and Security value.

For definitions relating to this policy, refer to Glossary.

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

1.2 Security collateral value - Market Value

Market value for real estate is defined as:

‘The estimated amount which a seller would expect to receive from an informed purchaser for the property in the current resale market with normal marketing support through an Australian based real estate agency. The market value is determined on a vacant possession basis and must exclude purchase incentives, non-fixed chattels, legal / stamp duty costs and rental guarantees.’

A market value assessed on this basis will not reflect the mortgagee in possession or other forced sale circumstances.

Also see:

More than one market value
Contract of Sale (COS)

1.3 What are acceptable real estate valuation methods?

The bank accepts the following real estate valuation methods and will apply the below hierarchy where multiple valuations are held within the acceptable age limit:

Residential & Construction Long Form valuation
Residential & Construction Short Form valuation
Desktop valuation
Automated Valuation Model (AVM) (also known as Modelled Estimate, Electronic Assessment, E-Val)

e.g. If the existing valuations are AVM, Desktop and Short Form, then use the Short Form

2. Rules you must apply

2.1 Customer estimated market value

The customer estimated market value is the estimated dollar value the customer provides us of their residential real estate property.
During the R&O conversation a discussion would be had with the customer about the amount of funding they require and what the funds would be used for. It is reasonable to assume the customer estimate value of their property is sufficient to meet their needs in line with the R&O.
The customer estimated market value is not to be amended within an application once a valuation (any type) has been completed.

Also see Automated Valuation Model (AVM).

2.2 Assessing security collateral value using the valuation report

Valuation reports are only to be accepted from valuers on the Westpac Group approved Residential Valuer panel. All valuation reports are to be addressed to the Bank.

2.3 Requesting a Valuation Report

A valuation report:

can only be requested by an authorised staff member or Broker of Westpac Banking Group and must be ordered via Property Hub
cannot be requested for the purchase of a property where the offer has not been accepted by the owner (to assist a prospective purchaser e.g. pre-purchase valuations are not permitted )

2.4 Ownership of Valuation Report

All valuation reports remain the property of the Bank and should not be offered to the customer. Reports are prepared for and addressed to the Bank for residential mortgage lending purposes.

If a customer requires a copy of the bank valuation to support their application for a grant, the customer is to complete the ‘ Customer declaration and acknowledgement ’ form and only on receipt of the signed form can the valuation be provided to the customer.

2.5 Reading the Valuation Report

The valuation report must be read in its entirety. Adverse comments in the valuation report may make the property unacceptable as security collateral, characteristics are to be further investigated and where necessary, the application is to be referred to Credit.

Refer to Process > Reviewing and actioning a Residential Short Form Valuation

2.6 Risk Rating in Valuation Report

Non-mortgage insured Includes applications assessed with LMI waived under: ‘Special Packages’ LMI waiver policies, or Lenders Mortgage Insurance policy > Existing insured loans - Variations and Top Up premiums > LMI waiver – Legacy LMI providers ‘QBE and Helia (formerly Genworth)’
Scenario	Risk ratings (in all cases ignore a 4 'risk rating' for 'Improvements' in 'to be erected valuations')	Refer to Credit (Yes / No)
Any Product	Any 5	Yes
Living area less than 40sqm	Any	Yes
Where the security requires repairs less than or equal to $25k	Less than or equal to 4	No
Where the security requires repairs greater than $25k	Any	Yes

Mortgage insured Mortgage Insured ‘refer to Credit rules’ will apply where the LVR is greater than 80% and the Bank is either paying the Mortgage insurance premium on behalf of the borrower or the borrower is paying a reduced mortgage insurance premium. For example if the Bank is running a campaign for First Home Buyers with a $1 MI premium and the LVR is greater than 80%, follow Mortgage Insured rules.
Scenario	Risk ratings (in all cases ignore a 4 'risk rating' for 'Improvements' in 'to be erected valuations')	Refer to Credit (Yes / No)
Any Product	Any greater than or equal to 4	Yes
Living area 40sqm to less than 50sqm	Any greater than or equal to 4	Yes
Living area 40sqm to less than 50sqm And mortgage insurer is Helia (formerly Genworth)	Any	Yes
Living area less than 40sqm	Any	Yes
Where the security requires repairs less than or equal to $5k	Less than 4	No
Where the security requires repairs less than or equal to $5k	Greater than or equal to 4	Yes
Where the security requires repairs greater than $5k	Any	Yes

2.7 More than one market value

In situations where more than 1 market value is available on the one valuation report, use the lower of the values except where:

Credit (or other Credit Risk authorised staff) have approved using a higher value, or
Where the below applies

Where the security collateral is subject to a Defence Housing Authority (DHA) sale and leaseback arrangement, the panel valuer's valuation report will contain 2 property values. The lower figure represents the vacant possession value. The higher figure is the vacant possession value plus the worth of the government rental guarantee. Where the loan is mortgage insured or requires a valuation, then the higher figure is acceptable if:

The rental guarantee assessment is not greater than 110% of the vacant possession assessment
The loan is amortising
The lease has 6 or more years to run excluding options to renew. Where the loan is not subject to mortgage insurance or the LVR ≤ 80%, then the higher valuation figure is acceptable.

2.8 Contract of Sales (Purchase Price)

A Contact of Sale (COS) is not to be used in isolation as a security collateral value assessment.
Also see:

Requirements to obtain a COS
Review of COS
Minimum criteria to be obtained from the COS
Automated Valuation Model ( AVM )

2.8.1 Requirements to obtain a COS

A fully executed contract by the vendor and purchaser must be held prior to settlement where:

The application is to be mortgage insured
The application includes a First Home Owner Grant (FHOG)
An AVM is being used to validate the purchase price as the security valuation method. You must identify if the purchase price includes any non-fixed chattels, rebates or incentives offered.

A full copy of the COS (does not need to be fully executed) must be held when an SDR assessment is required on the property being purchased.
For all other circumstances a full copy of the COS is preferred but not mandatory.

2.8.2 Review of COS

A COS received during the application process must be reviewed to:

ensure the security meets the below criteria :
- the property must be zoned to allow residential usage. For further information refer to Acceptable Security Collateral policy > Assessing security collateral requirements
- the cost / value of any chattels (e.g. furnishings) and / or rebates or incentives being offered by the vendor are to be deducted from the total purchase price to determine the security value. Refer to Chattels, Rebates and Incentives
- the security is being purchased
Request a valuation report via Property Hub where it is identified that:
- the transaction is not being completed at arm's length through an independent Australian based real estate agent (i.e. it is a private sale), or
- the Contract of Sale indicates a ‘Put and Call’ contract , or
- the Contract of Sale is older than 3 months

If the COS is undated and is not a First Home Owners Grant (FHOG) application, assume that the contract date is the date the Privacy Consent was obtained.

Also refer to:

Contract of sale (purchase price)
Minimum criteria to be obtained from the Contract of Sale

2.8.3 Minimum Criteria to be obtained from the Contract of Sale

Where you are required to obtain a copy of the contract of sale, the document must display the minimum criteria as per Document Standards

2.9 Chattels, Rebates and Incentives

Where a contract of sale includes any non-fixed chattels ^# , Rebates or Incentives offered, the cost / value of any non-fixed chattels (e.g. furnishings) and / or the value of any rebates or incentives offered by the vendor are to be deducted from the total purchase price to determine the security value which is entered in the origination platform.
Where this adjustment to the security value is required, an AVM can-not be used to validate the COS purchase price. The AVM is not to be ordered and the next higher valuation type is to be requested.

2.9.1 Chattels

^# The below list of chattels are to be assessed as 'fixed' and no further action is required when they are specified in a contract of sale:

Air conditioning equipment (including heaters and fans)
BBQs
Built in furniture, outdoor furniture
Carpets / floor coverings
Clothes dryer, washing machine
Dishwashers
Fish tanks
Fridges / Freezers
Garden decor (statues, ponds, lights, plants, pots, fountains etc.)
Garden irrigation equipment (i.e. domestic use)
Garden sheds, clothes lines, cubby houses, bird aviary
Kitchen island benches detached / movable
Inbuilt Audio / Video systems (including home theatre systems)
Lawn mowers (including ride on mowers)
Light fittings
Ovens (including Microwave ovens) / Cooktops / Rangehoods
Pool tables
Pools, spas and equipment
Remote control devices
Security systems
Septic tanks
Television (including TV antennas, satellite dish or pay TV equipment)
Wardrobes
Water tanks / pumps
Window treatments

2.10 Automated Valuation Model (AVM)

An Automated Valuation Model (AVM) is an electronic valuation that is completed based on recent property sales in the area. They are also known as Modelled Estimate, Electronic Assessment or E-Vals. An AVM is a brief report that indicates the amount the property is worth.

Where an AVM search on a security collateral property is successful, it is used to validate the purchase price (COS) or the customer estimated market value. The validation is restricted to:

the specific customer the AVM was ordered for, and
only being used where the LVR for the loan (i.e. the LVR inclusive of all security values) is equal to or less than the maximum end LVR (i.e. capitalised LVR) value returned with the search.

Where an AVM for a security collateral in the loan returns a maximum end LVR result that is less than the LVR for the loan, then the security collateral will require an alternate valuation method (either a Desktop if policy permits, or a full valuation).

Where an AVM has been completed, the customer estimated market value is not to be amended. The AVM result can only be relied upon based on the original customer estimated market value or contract price.

2.11 Valuation amount lower than purchase price

There may be circumstances in which the valuation of a property is significantly less than the stated purchase price.

Where the valuation amount is less than 90% of the purchase price, the customers (and guarantor/s if any) are to be informed in writing and their written acknowledgement obtained.

For applications approved via OBP, borrower/s are informed of, and acknowledge their acceptance (wet signature or digital) via the application 'playback 'document, which is part of the loan offer pack. Guarantor/s receive the application 'playback 'document with their guarantee documents to review before signing a guarantee

2.12 Re-using an Existing Valuation

Valuation methods previously used to determine the value of a security collateral are stored in the Bank’s system and ValEx and may be re-used subject to meeting policy requirements.
Existing valuation results (excluding AVM) held in the valuation system for a specific property may be used for a different customer as a valid existing valuation in terms of assessing residential security.

2.13 Postcode Categories

2.13.1 Postcode Category by States / Territory

Postcodes by State/Territory have been segmented into specific ‘Categories’ depending on a number of factors including population size, location-specific attributes and pre-defined risk profile. These categories are then applied in accordance with this policy.

NSW / ACT

Category		Postcodes
1	Metro	2000, 2007 – 2011, 2015 – 2234, 2250 – 2265, 2267, 2278, 2280 – 2308, 2315 – 2323, 2327, 2340, 2444, 2450, 2452, 2477 – 2489, 2500 – 2534, 2555 – 2579, 2600 – 2621, 2640-2641, 2650 – 2651, 2745 – 2774, 2776 – 2785, 2795, 2830, 2900 – 2914
2	Regional	2324 – 2326, 2330, 2333-2335, 2350, 2428 – 2430, 2443, 2445, 2446, 2456, 2460, 2464, 2490, 2535, 2538 – 2541, 2580, 2680, 2731, 2738 – 2739, 2800
3	Larger Country	2360, 2380, 2400, 2427, 2431, 2440, 2447, 2448, 2454 – 2455, 2463, 2466, 2470, 2536 – 2537, 2546, 2548 – 2549, 2550, 2551, 2582 – 2583, 2594, 2630, 2642 – 2643, 2647, 2710, 2720, 2790, 2794, 2850, 2870, 2880
4	Not used	Not currently used
5	High Density	2000 – 2006, 2008, 2138, 2140, 2205 (These postcodes relate to unit properties only)
6	High Risk	2007, 2009, 2015 – 2017 (These postcodes relate to unit properties only)
7	Country	2309 – 2312, 2328 – 2329, 2331, 2336 – 2339, 2341 – 2347, 2352 – 2359, 2361, 2365, 2369 – 2372, 2379, 2381 – 2382, 2386 – 2388, 2390, 2395 – 2399, 2401 – 2411, 2415, 2420 – 2426, 2439, 2441, 2449, 2453, 2462, 2465, 2469, 2471 – 2476, 2545, 2581, 2584 – 2590, 2622 – 2629, 2631 – 2633, 2644 – 2646, 2648-2649, 2652 – 2653, 2655 – 2656, 2658 – 2661, 2663, 2665 – 2666, 2668 – 2669, 2671 – 2672, 2675, 2681, 2700 – 2703, 2705 – 2707, 2711 – 2717, 2721 – 2722, 2725 – 2727, 2729 – 2730, 2732 – 2737, 2775, 2786 – 2787, 2791 – 2793, 2797 – 2799, 2803 – 2810, 2818, 2820 – 2821, 2823 – 2825, 2827 – 2829, 2831 – 2836, 2839 – 2840, 2842 – 2849, 2852, 2864 – 2869, 2871, 2873 – 2879, 2898 – 2899
8	Two Tier	Not currently used

VIC

Category		Postcodes
1	Metro	3000 – 3009, 3011 – 3207, 3211– 3216, 3218 – 3220, 3221, 3222 – 3228, 3232 - 3234, 3335 – 3341, 3429, 3690, 3750, 3752, 3754 – 3755, 3765 – 3767, 3781 – 3796, 3802 – 3810, 3812, 3910 – 3920, 3926 – 3944, 3975 – 3978
2	Regional	3217, 3230, 3280, 3350, 3355 – 3356, 3358, 3437 – 3438, 3460 - 3461, 3500 – 3501, 3550 – 3556, 3564, 3630 – 3631, 3691, 3756 – 3757, 3759, 3761, 3770, 3775, 3777, 3840 – 3842, 3844
3	Larger Country	3231, 3249 – 3250, 3300, 3305, 3331, 3352, 3357, 3363, 3377, 3400, 3431, 3440, 3442, 3444, 3450, 3465, 3585, 3616, 3620, 3629, 3636, 3660, 3672, 3677, 3730, 3758, 3764, 3814 – 3816, 3818, 3820, 3823 – 3825, 3850, 3875, 3880, 3909, 3922, 3980 – 3981, 3995 – 3996
4	Not used	Not currently used
5	High Density	3000 – 3005, 3007, 3009, 3141, 3205 (These postcodes relate to unit properties only)
6	High Risk	3006, 3008 (These postcodes relate to unit properties only)
7	Country	3235 – 3243, 3251, 3254, 3260, 3264 – 3279, 3281 – 3287, 3289, 3292 – 3294, 3301 – 3304, 3309 – 3312, 3314 – 3315, 3317 – 3319, 3321 – 3325, 3328 – 3330, 3332 – 3334, 3342, 3345, 3351, 3360 – 3361, 3364, 3370 – 3371, 3373, 3375, 3378 – 3381, 3384 – 3385, 3387 – 3388, 3390 – 3393, 3395 – 3396, 3399, 3401, 3407, 3409, 3412 – 3415, 3418 – 3420, 3423 – 3424, 3427 – 3428, 3430, 3432 – 3435, 3441, 3446 – 3448, 3451, 3453, 3458, 3462 – 3464, 3467 – 3469, 3472 – 3480, 3482 – 3483, 3485 – 3491, 3494, 3496, 3498, 3505 – 3507, 3509, 3512, 3515 – 3518, 3520 – 3523, 3525, 3527, 3529 – 3531, 3533, 3537, 3540, 3542, 3544, 3546, 3549, 3557 – 3559, 3561 – 3563, 3565 – 3568, 3570 – 3573, 3575 – 3576, 3579 – 3581, 3583 – 3584, 3586, 3588 – 3591, 3594 – 3597, 3599, 3607 – 3608, 3610, 3612, 3614, 3617 – 3619, 3621 - 3624, 3633 – 3635, 3637 – 3641, 3644, 3646, 3649, 3658 – 3659, 3662 – 3666, 3669 – 3670, 3673, 3675, 3678, 3682 – 3683, 3685, 3687 – 3688, 3694 – 3695, 3697 – 3701, 3704 – 3705, 3707 – 3709, 3711 – 3715, 3717 – 3720, 3722 – 3723, 3725 – 3728, 3732 – 3733, 3735, 3737 – 3741, 3744, 3746 – 3747, 3749, 3751, 3753, 3760, 3762 – 3763, 3778 – 3779, 3797, 3799, 3813, 3821, 3822, 3831 – 3833, 3835, 3843, 3847, 3851, 3854, 3856 – 3860, 3862, 3864 – 3865, 3869 – 3871, 3873 – 3874, 3878, 3882, 3885 – 3893, 3895 – 3896, 3898, 3900, 3902 – 3904, 3921, 3923 – 3925, 3945 – 3946, 3950 – 3951, 3953 – 3954, 3956 – 3960, 3962, 3964 – 3967, 3971, 3979, 3984, 3987 – 3992
8	Two Tier	Not currently used

QLD

Category		Postcodes
1	Metro	4000 – 4022, 4030 – 4179, 4205 – 4221, 4223, 4224- 4229, 4280, 4300 – 4306, 4350, 4500 – 4512, 4516 – 4520, 4550 – 4567, 4572 – 4573, 4575, 4700 – 4701, 4711, 4740, 4750 – 4751, 4810 – 4815, 4817 – 4818, 4865, 4868 – 4870, 4878 – 4879
2	Regional	4270 – 4272, 4352, 4370, 4514, 4521, 4568, 4570, 4655, 4670, 4680, 4703, 4710, 4720, 4753, 4802, 4819, 4877, 4881, 4883
3	Larger Country	4285, 4343, 4405, 4610, 4650, 4737, 4800, 4805, 4807 – 4808, 4816, 4820, 4825, 4850, 4860, 4880
4	Not used	Not currently used
5	High Density	4001 – 4004, 4215, 4217, 4218, 4870, 4879 (These postcodes relate to unit properties only)
6	High Risk	4000, 4005 – 4006 (These postcodes relate to unit properties only)
7	Country	4025, 4183 – 4184, 4275, 4287, 4307, 4309 – 4314, 4340 – 4342, 4344 – 4347, 4353 – 4365, 4371 – 4378, 4380 – 4385, 4387 – 4388, 4390, 4400 – 4404, 4406 – 4408, 4410 – 4413, 4415 – 4428, 4454 – 4455, 4461 – 4462, 4465, 4467 – 4468, 4470 – 4472, 4474 – 4475, 4477 – 4482, 4486 – 4494, 4496 – 4498, 4515, 4569, 4571, 4574, 4580 – 4581, 4600 – 4601, 4605 – 4606, 4608, 4611 – 4615, 4620 – 4621, 4625 – 4627, 4630, 4659 – 4660, 4662, 4671, 4673 – 4674, 4676 – 4678, 4694 – 4695, 4697, 4699, 4702, 4704 – 4707, 4709, 4712 – 4719, 4721 – 4728, 4730 – 4733, 4735 – 4736, 4738 – 4739, 4741 – 4746, 4754, 4756 – 4757, 4798 – 4799, 4803 – 4804, 4806, 4809, 4821 – 4824, 4828 – 4830, 4849, 4852, 4854 – 4859, 4861, 4871 – 4876, 4882, 4884 – 4888, 4890 – 4891, 4895
8	Two Tier	Not currently used

SA

Category		Postcodes
1	Metro	5000, 5006 – 5174, 5231 – 5234, 5240 - 5251
2	Regional	5211 – 5214, 5290, 5355, 5600, 5608 – 5609
3	Larger Country	5201 – 5204, 5252, 5253, 5255, 5280, 5291, 5333, 5341, 5343, 5345, 5351 – 5353, 5453, 5501, 5540, 5554 – 5556, 5558, 5606, 5700
4	Not used	Not currently used
5	High Density	5000 (These postcodes relate to unit properties only)
6	High Risk	–
7	Country	5210, 5220 – 5223, 5235 – 5238, 5254, 5256, 5259 – 5279, 5301 – 5312, 5320 – 5322, 5330 – 5332, 5340, 5342, 5344, 5346, 5350, 5354, 5356 – 5357, 5360, 5371 – 5374, 5381, 5400 – 5401, 5410, 5411 – 5422, 5431 – 5434, 5440, 5451 – 5452, 5454 – 5455, 5460 – 5462, 5464, 5470 – 5473, 5480 – 5483, 5485, 5490 – 5491, 5493, 5495, 5502, 5510, 5520 – 5523, 5550, 5552, 5560, 5570 – 5573, 5575 – 5577, 5580 – 5583, 5601 – 5605, 5607, 5630 – 5633, 5640 – 5642, 5650 – 5655, 5660 – 5661, 5670 – 5671, 5680, 5690, 5701, 5710, 5720, 5722 – 5725, 5730 – 5734
8	Two Tier	Not currently used

WA

Category		Postcodes
1	Metro	6000 – 6038, 6040 – 6074, 6076 - 6214, 6229, 6230, 6232-6233, 6280 – 6282, 6284 – 6285, 6330, 6530
2	Regional	6231, 6290, 6450, 6725 – 6726
3	Larger Country	6225, 6333, 6401, 6430, 6432, 6714, 6721 – 6722, 6713
4	Not used	Not currently used
5	High Density	6000 – 6005, 6210 (These postcodes relate to unit properties only)
6	High Risk	–
7	Country	6215, 6218, 6220 – 6221, 6223 – 6224, 6226 – 6228, 6236 – 6237, 6239 – 6240, 6243 – 6244, 6251 – 6256, 6258, 6260, 6262, 6271, 6275, 6286, 6288, 6302, 6304, 6306, 6308 – 6309, 6311 – 6313, 6315 – 6318, 6320 – 6324, 6326 – 6328, 6335 – 6338, 6341, 6343, 6346, 6348, 6350 – 6353, 6355 – 6359, 6361, 6363, 6365, 6367 – 6370, 6372 – 6373, 6375, 6383 – 6386, 6390 – 6398, 6403, 6405, 6407, 6409 – 6415, 6418 – 6429, 6431, 6433 – 6448, 6452, 6460 – 6463, 6465 – 6468, 6470, 6472 – 6473, 6475 – 6477, 6479 – 6480, 6484 – 6485, 6487 – 6490, 6501 – 6507, 6509 - 6519, 6521 – 6522, 6525, 6528, 6532, 6535 – 6537, 6556, 6558, 6560, 6562, 6564, 6566 – 6569, 6571 – 6572, 6574 – 6575, 6603, 6605 – 6606, 6608 – 6609, 6612 – 6614, 6616, 6620, 6623, 6625, 6627 – 6628, 6630 – 6632, 6635, 6638 – 6640, 6642, 6646, 6701, 6705, 6707, 6710, 6711, 6712, 6716, 6718, 6720, 6728, 6731, 6733, 6740, 6743, 6751, 6753, 6754, 6758, 6760 – 6762 , 6765, 6770, 6798 – 6799, 6999
8	Two Tier	Not currently used

NT

Category		Postcodes
1	Metro	800, 810 – 820, 828 – 832
2	Regional	834, 835, 836, 870, 875
3	Larger Country	850
4	Not used	Not currently used
5	High Density	800 (These postcodes relate to unit properties only)
6	High Risk	–
7	Country	822, 837 – 841, 845 – 847, 851 – 854, 860 – 862, 871 – 872, 880 – 881, 885 – 886
8	Two Tier	Not currently used

TAS

Category		Postcodes
1	Metro	7000 – 7019, 7021, 7050 – 7055, 7170 – 7172, 7248 – 7250, 7258, 7277, 7290, 7300
2	Regional	7025, 7173, 7307, 7310 – 7315
3	Larger Country	7030, 7316, 7320, 7325
4	Not used	Not currently used
5	High Density	7000 (These postcodes relate to unit properties only)
6	High Risk	–
7	Country	7020, 7022 – 7024, 7026-7027, 7109, 7112 – 7113, 7116 – 7117, 7119 – 7120, 7139 – 7140, 7150 – 7151, 7155, 7162 – 7163, 7174 – 7180, 7182 – 7187, 7190, 7209 – 7216, 7252 – 7257, 7259 – 7265, 7267 – 7268, 7270, 7275 – 7276, 7291 – 7292, 7301 – 7306, 7321 – 7322, 7330 – 7331, 7466 – 7470
8	Two Tier	Not currently used

2.13.2 Disaster Postcodes

2021 WA Bushfire locations
Maximum age of an existing valuation is as per standard policy

6083

6084

6558

2021 WA Cyclone Seroja locations Maximum age of an existing valuation is as per standard policy
6536

2021 Land subsidence locations Maximum age of an existing valuation is as per standard policy
2570

2021 NSW Flood locations. Maximum age of an existing valuation is as per standard policy
2430

2022 NSW Flood locations.
Feb 2022 Maximum age of an existing valuation is as per standard policy
2330	2460	2462	2463	2753	2756	2480
Oct 2022 Maximum age of an existing valuation is as per standard policy
2380	2390	2399	2400	2806	2824	2866	2871	2877
Jul 2022 Maximum age of an existing valuation is as per standard policy
2775

2022 QLD Flood locations.
Feb 2022 Maximum age of an existing valuation is as per standard policy
4067	4101	4103	4104	4650

2022 VIC Flood locations.
Oct 2022 Maximum age of an existing valuation is as per standard policy
3561	3579	3629	3630	3631

2.13.4 Concentration Risk Postcodes

Concentration Risk Postcodes
0880	0881	4717	4718	4742	4744	4745	4746	4803	4804
4854	4874	5725	6348	6390	6429	6442	6714	6720	6721
6722	6751	6753	6798

2.13.5 Island postcodes not connected by a road bridge to the mainland

Island postcodes not connected by a road bridge to the mainland The below are known postcodes for island locations not connected by a road bridge. This postcode list is not definitive. In some cases a mainland and island location may share the same postcode. Brokers/assessors must manually check if the security location is also an island location not connected by a bridge and apply the correct LVR.
2898	2899	4025	4183	4184	4803	4819	5220	5221	5222
5223	6798	6799	7255	7256

2.14 Assessing non-real estate security collateral value

The only acceptable non-real estate security collateral is a term deposit. The market value of a term deposit is determined by the face value of the investment.
Note: This security type is not available for mortgage insured applications.

2.15 Valuation Review

If the below criteria, applies the valuation cannot be reviewed / challenged:

Security assessment is an electronic (E-val) assessment or desktop assessment
The resultant LVR is within acceptable non mortgaged insured lending guidelines
Date of the escalation is more than one month from the date of the valuation
If a loan is mortgage insured by Helia (formerly Genworth)

3. Process to follow

3.1 Desktop Valuation

The Desktop Valuation result will be provided with a detailed message based on the following policy parameters:

Contract price or estimated market value is validated when the Desktop is not more than 10% or not more than $50,000 under the contract amount or estimated market value. Use the contract amount or estimated market value.

Contract price is not validated. A Residential Short Form Valuation must be ordered.

If estimated market value is not validated, the Desktop price estimate result may be used.

3.2 Residential Short Form Valuation

3.2.1 Reviewing and actioning a Residential Short Form Valuation:

Residential Short Form valuation reports showing any of the following features must be referred to Credit to determine if the property is acceptable as collateral security:

Loan Type	Feature requiring referral
Mortgage Insured loan	Any of the below:
	The Valuation Risk Alerts (VRAs) answered ‘Yes’ to Does the subject property comprise a higher risk or a non-residential property type? Are there any adverse marketability issues that would require an extended selling period of more than 6 months? Are the existing improvements on the property incomplete, under construction or requiring essential repairs? Is the subject property critically affected by any Heritage, location or environmental issues?
	Any other Critical Risk or adverse features highlighted in valuer's comments (other than above) 1. "Critical" risks - specific to the subject property and/or considered to have a negative impact on marketability or value of the subject property 2. Adverse features evident on the valuation. Defined as "Any material adverse risks affecting the subject property " including but not limited to: property incomplete or poorly maintained and in need of repairs (Essential Repairs / Repairs >$5k). being sold by a builder/developer (where valuer comment relates to Rebates, cash-back arrangements evident or other adverse comments relating to Purchase or Building Contracts) any part of the property not being used for its designed purpose, is something other than strictly residential, any structures/ improvements that may not be council approved property is affected by a "critical risk" attributable to any heritage, location or environmental issues (the risk is specific to the property and is not generally accepted by the market) the property saleability and/or value may be adversely affected by a "critical risk" specific to the property, or known/observable encumbrances, issues or on-going heightened concern as advised by the valuer, that is not generally accepted by the market or results is restricted marketability (e.g. RTA affectation, restricted use, adverse easements , proximity to Railway Lines , Commercial/Industrial Area, Adverse Zoning, restricted use/unique in nature) Selling period >6 months Minimum requirements for Sales Evidence unavailable/ Lack of acceptable Comparable Sales. (At least three (3) comparable sales presented. Comparable sales to be like-for-like (property), preferably within 15% variance and within 6 months of the valuation date.) NOTE: Permissible for two (2) comparable sales held within acceptable parameters, in addition with one (1) sale outside supported by a satisfactory explanation and where other strengths are evident within the application.
	Any scenario requiring referral as detailed under Risk Rating of Valuation Report.
Non-Mortgage Insured loan	Any scenario requiring referral as detailed under Risk Rating of Valuation Report.

3.3 Reviewing and actioning a Residential Long Form Valuation

Residential Long Form valuation reports are all to be assessed to determine if the property is acceptable as security and the valuation amount to be accepted.

This Includes (but not limited to):

Property use and description matches the security characteristics within the loan assessment system– (e.g. Mixed use, Land Size Etc)
Review the content of a valuation report in full
Where necessary on review of valuation, and adverse features are apparent (including Risk Ratings as below) the application is to be referred to Credit

Refer to 'How to read a long form valuation' guide.

3.4 Valuation Review

Step	Action
1	Read the valuation in its entirety, as often the valuer’s comments in the report and the comparable sales utilised will explain and/or clarify why the valuation has come in lower than the customer's estimate. At this point the customer’s concerns can be managed by the broker without further consultation or delay.
2	If after reading the valuation fully and customer is still not satisfied with the explanation provided by the broker and there is other relevant factual sales information* that supports consideration for a review, then the valuation can be queried as follows: The Broker can request Mortgage Operations to raise a Value Query directly with the Valuer in ValEx system and provide the additional comparable sales for consideration (settled sales will be viewed more favourably). Note: To ensure service levels are not compromised, communications with the valuer must be kept brief, factual and professional at all times. Inappropriate behaviour will not be tolerated, and all instances will be referred to the respective state general manager for action as required. Relevant information includes: Commentary confirming an oversight or error made by the valuer; or Valid Comparable sales (which do not already appear in the valuation report) within the last 6 months, with details of: Within the same location and not from within the same complex if a new development similar price range Similar with regards to condition, price range, type of property, land size, and layout (bedrooms, bathrooms etc) Note*: Sales evidence cannot include properties sold directly from the Developer; they must be re-sales.
3	The valuer will review the valuation query and either agree to adjust the valuation or reconfirm the original valuation. If the valuer agrees to adjust the valuation, the report will be amended and delivered through ValEx. Note: The valuer must support the adjusted valuations with appropriate justifiable comments and/or additional sales evidence. Should CoreLogic compliance identify an issue with the report, it will be returned to the Valuer to review. Note: Lodging a query does not guarantee the valuation will be amended, therefore customers should not be prematurely advised of a possible outcome.

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

20 February 2022

Change 1
Update to section 3.4 Valuation Review and Check Valuation.
Table has been updated to show who is responsible for each action.
Change 2 - Policy correction.
Removal of postcode 2765 from section 2.5.3 Flood Affected Postcodes. (2765 was incorrectly included in the list of postcodes requiring a valuation dated after 1/4/2021 in the policy change implemented Aug 2021)

22 May 2022

Change 1
Updated section ‘2.1.4 Desktop Valuation’ to add note “The use of desktop valuations is limited by available data and sales results. There are locations within postcode categories where desktop valuations are not acceptable. The system decision must be followed”.

Change 2

Change to content in section 3.2.2 Risk Rating of Valuation Report, new allowable variance added
Market Risk Rating related to Direction (price)
Applications may be progressed without referral to Credit where:

the valuation contains a single Market Risk rating for Direction (price) of >=4 and the valuation comments identify the market risk rating is specific to COVID-19 factors only.

Assessment notes must be added to origination systems to confirm and acknowledge the RR4 or RR5 is COVID-19 related only (e.g. the commentary provided by the valuer references COVID-19 and / or lockdowns as the cause of the Market uncertainty) and the application is being progressed as an allowable variance.
Applications may not be progressed without referral to Credit where:

the market risk ratings valuation comments include non-COVID-19 related factors.
there are adverse risk ratings on any other valuation characteristics, including where an extended selling period of over 6 months is noted.

Change 3
Change to content in section 3.2.2 Risk Rating of Valuation Report and 2.3 Assessing security collateral value using Automated Valuation model (Acceptable Security Type table)
Change from segmenting the refer to Credit rules:
from:

Non-Mortgage Insured loans
Mortgage Insured loans or LVR > 80% (including LMI waiver)

To:

Non-Mortgage Insured loans (includes applications assessed under ‘Special Packages’ LMI waiver policies)
Mortgage Insured loans ²

New legend item 2
Mortgage Insured ‘refer to Credit rules’ will apply where the LVR > 80% and the Bank is either paying the Mortgage insurance premium on behalf of the borrower or the borrower is paying a reduced mortgage insurance premium.
For example if the Bank is running a campaign for First Home Buyers with a $1 MI premium and the LVR is > 80%, follow Mortgage Insured rules.
Change 4

General rewrite to remove procedures from policy and improve policy clarity

17 July 2022

Change 1

Created new section 2.15.3 and new category of ‘Disaster Postcodes’:
- Re-located existing postcodes for ‘2021 WA Bushfire’, 2021 ‘WA Cyclone’, ‘2021 Land Subsidence’ and ‘2021 NSW Flood locations’ under the ‘Disaster Postcodes’ category. Postcodes in this category require a default full valuation, and where an existing full valuation is held it must comply with specified maximum age restrictions. No change to policy or risk appetite- clarification only change
- Added new 2022 ‘QLD’ and ‘NSW’ Flood postcodes to the ‘Disaster Postcodes’ category. Default full valuation required, and existing full valuation dated prior to 23/02/2022 cannot be used- new full valuation is required

Updated section ‘Restricted existing valuation postcodes’:
- Removed sentence ‘Restrictions are in place regarding re-using existing valuations for properties located in the following postcodes’. No change to policy or risk appetite -Simplification change only to remove repeated content
Replaced some references to ‘shortform valuation’ with ‘full valuation’ to align terminology. No change to policy or risk appetite- clarification only change

Change 2
Correction of publishing error to section 1.3 What are acceptable real estate valuation methods? Valuation types are to be numbered to reflect the hierarchy of use.
Old
The bank accepts the following real estate valuation methods and will apply the below hierarchy where multiple valuations are held within the acceptable age limit:

Residential & Construction Long Form valuation
Residential & Construction Short Form valuation
Desktop valuation
Automated Valuation Model (AVM) (also known as Modelled Estimate, Electronic Assessment, E-Val)

New
The bank accepts the following real estate valuation methods and will apply the below hierarchy where multiple valuations are held within the acceptable age limit:

Residential & Construction Long Form valuation
Residential & Construction Short Form valuation
Desktop valuation
Automated Valuation Model (AVM) (also known as Modelled Estimate, Electronic Assessment, E-Val)

Change 3
Update to 2.8 Risk Rating in Valuation Report > Non-mortgage insured table.
Deleted duplicate sentence from table ‘ (includes applications assessed under ‘Special Packages’ LMI waiver policies) Non-mortgage insured

Change 4
Rewording of section 2.11 Chattels, rebates and incentives (no change to policy rules)
Old
Should the contract include any non-fixed chattels ^# , Rebates or Incentives offered, and the OBP decision is initially for an AVM, the AVM is not to be ordered and the next valuation type is to be ordered
The cost / value of any non-fixed chattels (e.g. furnishings) and / or the value of any rebates or incentives offered by the vendor are to be deducted from the total purchase price to determine the security value.
New
Where a contract of sale includes any non-fixed chattels^#, Rebates or Incentives offered, the cost / value of any non-fixed chattels (e.g. furnishings) and / or the value of any rebates or incentives offered by the vendor are to be deducted from the total purchase price to determine the security value which is entered in the origination platform.
Where this adjustment to the security value is required, an AVM can-not be used to validate the COS purchase price. The AVM is not to be ordered and the next higher valuation type is to be requested. For valuation hierarchy, refer to ‘What are acceptable real estate valuation methods.’

21 August 2022

Updated references to the ‘Minimum Document Standards Matrix’. The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter. Existing references have been updated to point to the ‘Document Standards’ chapter

2 October 2022

Updated section ‘Risk Rating in Valuation Report’:
Under ‘Non-mortgaged insured’ updated the definition: From ‘Non-mortgage insured (includes applications assessed under ‘Special Packages’ LMI waiver policies)’ to ‘Includes applications with LMI waived under: ‘Special Packages’ LMI waiver policies or; ‘ Lenders Mortgage Insurance policy > Existing insured loans - Variations and Top Up premiums > LMI waiver – Legacy LMI providers ‘QBE and Genworth’ ‘QBE and Genworth’

20 November 2022

Change 1

Updated section ‘Requesting a Valuation Report’ to include ‘A Valuation report cannot be requested for the purchase of a property where the offer has not been accepted by the owner (to assist a prospective purchaser)

Change 2

Deleted the below:

2.5.2 Restricted Existing Valuation Postcodes

2485	2486	2487
4205	4207	4208	4209	4210	4211	4212	4213	4214	4215
4216	4217	4218	4219	4220	4221	4223	4224	4225	4226
4227	4228	4229	4271	4272	4275
4517	4518	4519	4550	4551	4552	4553	4554	4555	4556
4557	4558	4559	4560	4561	4562	4563	4564	4565	4566
4567	4568	4569	4571	4572	4573	4574	4575	4819

Under section ‘Disaster postcodes’:

For 2021 WA bushfire locations:
- Deleted postcodes 6055, 6069, 6082
- Replaced ‘If the valuation is dated prior to 01/02/2021 it is unacceptable to use the existing valuation. Order a new short form’ with ‘Maximum age of an existing valuation is as per standard policy’
For 2021 WA Cyclone Seroia locations:
- Replaced ‘If the valuation is dated prior to 15/04/2021 it is unacceptable to use the existing valuation. Order a new short form’ with ‘Maximum age of an existing valuation is as per standard policy’
For 2021 Land subsidence locations:
- Replaced ‘If the valuation is dated prior to 17/05/2021 it is unacceptable to use the existing valuation. Order a new short form’ with ‘Maximum age of an existing valuation is as per standard policy’
For 2021 NSW Flood Locations:
- Deleted postcodes 2422, 2423, 2425, 2431, 2439, 2440, 2441, 2443, 2444, 2447, 2460, 2462, 2756. (Note: 2460, 2462, 2756 remain on the 2022 NSW Flood locations list)
- Replaced ‘If the valuation is dated prior to 01/04/2021 it is unacceptable to use the existing valuation. Order a new short form’ with ‘Maximum age of an existing valuation is as per standard policy’

Change 3
Update to content in 2.10.2 Review of COS
Old wording
A COS must be reviewed to identify if any of the below criteria apply:

the property is not zoned to allow residential usage, refer to Acceptable Security Collateral policy
there are chattels (e.g. furnishings) and / or rebates or incentives being offered by the vendor. Also see Chattels, Rebates and Incentives
the transaction is not being completed at arm's length through an independent Australian based real estate agent (i.e. it is a private sale) refer to Default Residential full Valuation Scenarios

If the COS is undated and is not a First Home Owners Grant (FHOG) application, assume that the contract date is the date the Privacy Consent was obtained.
New wording
2.10.2 Review of COS
A COS received during the application process must be reviewed to ensure the security meets the below criteria :

the property must be zoned to allow residential usage. For further information refer to Acceptable Security Collateral policy > Assessing security collateral requirements
the cost / value of any chattels (e.g. furnishings) and / or rebates or incentives being offered by the vendor are to be deducted from the total purchase price to determine the security value. Also see Chattels, Rebates and Incentives
the security is being purchased
the transaction is not being completed at arm's length through an independent Australian based real estate agent (i.e. it is a private sale), refer to Default Residential full Valuation Scenarios

If the COS is undated and is not a First Home Owners Grant (FHOG) application, assume that the contract date is the date the Privacy Consent was obtained.
Also refer to:

Contract of sale (purchase price)
Minimum criteria to be obtained from the Contract of Sale

1 December 2022

Change 1:
Under section ‘Disaster postcodes > 2022 NSW Flood locations’:

Split list into Feb 2022 and Jul 2022 and added associated sub-headings
Moved postcode 2775 from Feb 2022 list, which had the rule ‘If the valuation is dated prior to 23/02/2022 it is unacceptable to use the existing valuation. Order a new full valuation’ to the Jul 2022 list with rule ‘If the valuation is dated prior to 01/07/2022 it is unacceptable to use the existing valuation. Order a new full valuation’. Clarification change to correct an error made in 20 Nov 2022 update

Change 2:
Under section ‘Disaster postcodes > 2022 QLD Flood locations’:

Added sub-heading ‘Feb 2022’ for all postcodes currently listed (clarification change to improve readability)

Change 3:
Under section ‘Review of COS’- clarification only change
Old wording
A COS received during the application process must be reviewed to ensure the security meets the below criteria :

the property must be zoned to allow residential usage. For further information refer to Acceptable Security Collateral policy > Assessing security collateral requirements
the cost / value of any chattels (e.g. furnishings) and / or rebates or incentives being offered by the vendor are to be deducted from the total purchase price to determine the security value. Also see Chattels, Rebates and Incentives
the security is being purchased
the transaction is not being completed at arm's length through an independent Australian based real estate agent (i.e. it is a private sale)

If the COS is undated and is not a First Home Owners Grant (FHOG) application, assume that the contract date is the date the Privacy Consent was obtained.
Also refer to:

a Contract of sale (purchase price)
Minimum criteria to be obtained from the Contract of Sale

New wording:
A COS received during the application process must be reviewed to:

Ensure the security meets the below criteria:
- the property must be zoned to allow residential usage. For further information refer to Acceptable Security Collateral policy > Assessing security collateral requirement
- the cost / value of any chattels (e.g. furnishings) and / or rebates or incentives being offered by the vendor are to be deducted from the total purchase price to determine the security value. Refer to Chattels, Rebates and Incentives
- the security is being purchased
Request a valuation report via Property Hub where it is identified that:
- the transaction is not being completed at arm's length through an independent Australian based real estate agent (i.e. it is a private sale), or
- the Contract of Sale indicates a ‘Put and Call’ contract , or
- the Contract of Sale is older than 3 months

If the COS is undated and is not a First Home Owners Grant (FHOG) application, assume that the contract date is the date the Privacy Consent was obtained.

Also refer to:

Contract of sale (purchase price)
Minimum criteria to be obtained from the Contract of Sale

19 February 2023

Change 1
Update to wording in section 2.5 Requesting a valuation report
Old wording

cannot be requested for the purchase of a property where the offer has not been accepted by the owner (to assist a prospective purchaser)

New wording

cannot be requested for the purchase of a property where the offer has not been accepted by the owner (to assist a prospective purchaser e.g. pre-purchase valuations are not permitted)

Change 2

Removal of obsolete line from: 2.6 Ownership of Valuation Report:
- “In all cases, no new Homebuilder applications will be considered after 22nd May 2022.”

Change 3
Update to content in section 2.5.1 Postcode Category by States / Territories

Postcode 4314 added to QLD – category 7

Change 4
Update to content in 2.8 Risk Rating in Valuation Report
Removal of authority, legend item 1 has been deleted

Legend item

Risk Rating Allowable Variations
The following policy outlines specific Risk Ratings that are acceptable under standard policy and a referral to Credit is not required:

Market Risk Rating related to Direction (price)
Applications may be progressed without referral to Credit where:
the valuation contains a single Market Risk rating for Direction (price) of >= 4 and the valuation comments identify the market risk rating is specific to COVID-19 factors only.

Assessment notes must be added to origination systems to confirm and acknowledge the RR4 or RR5 is COVID-19 related only (e.g. the commentary provided by the valuer references COVID-19 and / or lockdowns as the cause of the Market uncertainty) and the application is being progressed as an allowable variance.

Applications may not be progressed without referral to Credit where:
the market risk ratings valuation comments include non-COVID-19 related factors.
there are adverse risk ratings on any other valuation characteristics, including where an extended selling period of over 6 months is noted.

26 March 2023

Change 1
Update to show Company Name change for Mortgage Insurance Provider Genworth to Helia

21 May 2023

Change 1
New postcodes added to the 2022 ‘Disaster Postcodes’ list:

2022 VIC Flood locations
Oct 2022 Maximum age of an existing valuation is as per standard policy
3561	3579	3629	3630	3631

2022 NSW Flood locations
Oct 2022 Maximum age of an existing valuation is as per standard policy
2380	2390	2399	2400	2806	2824	2866	2871	2877

Change 2
Under section ‘Disaster Postcodes’, replaced specific existing valuation age restrictions related to the ‘disaster event date’ as detailed below:

2022 NSW Flood locations
Feb 2022 Old wording: If the valuation is dated prior to 23/02/2022 it is unacceptable to use the existing valuation. Order a new full valuation New wording: ‘Maximum age of an existing valuation is as per standard policy
2330	2460	2462	2463	2753	2756	2480
Jul 2022 Old wording: If the valuation is dated prior to 01/07/2022 it is unacceptable to use the existing valuation. Order a new full valuation New wording: Maximum age of an existing valuation is as per standard policy
2775

2022 QLD Flood locations
Feb 2022 Old wording: If the valuation is dated prior to 23/02/2022 it is unacceptable to use the existing valuation. Order a new full valuation New wording: Maximum age of an existing valuation is as per standard policy
4067	4101	4103	4104	4650

2 July 2023

Change 1
Replaced mathematical symbols ‘≤, =, >, <, ≥’ with equivalent words

Attachments

Attachment

03.04 How to read a long form valuation guide.pdf

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03.05 Commitments

Policy ID

03.05

Policy Name

Commitments

Policy Content

1. About this policy
1.1 Definition of a commitment
1.2 Why this policy
2. Rules you must apply
2.1 Policy exclusions
2.2 Customer commitments
2.3 Conflicting information
2.4 Confirm the details of the commitment
2.5 Financial hardship arrangement check and evidence satisfactory repayment history
2.5.1 Liabilities and Commitments exempt from financial hardship arrangement checks or conduct checks
2.6 Acceptable documents
2.7 Allowable variances
2.8 Time Frame / Age of document definition
2.9 Not on CCR - Verifying repayment history when not using CCR
3. Process to follow
3.1 Statutory Declarations
4. Frequently asked questions

1. About this policy

1.1 Definition of a commitment

A commitment is any regular repayment which a borrower or income guarantor (Spousal-Income Guarantee or Spousal-Income + Security Guarantee) may have. Commitments may be referred to as a debt, liability or facility which may be secured or unsecured. The commitment may vary from payment to payment, like the minimum payment on a credit card or be fixed at a nominated amount, for instance a personal loan repayment with a fixed interest rate.

Excludes items which are captured within Living Expenses policy.

1.2 Why this policy

This policy will help you in verifying existing commitments and repayment conduct.

This is a key part of the unsuitability assessment and is required for every applicant who is either a borrower or income-reliant guarantor.

Verification of the applicant's commitments ensures accurate information is used in completing a financial assessment and serviceability calculation.

Repayment history on existing debts is considered to be a critical indicator of an applicant's credit worthiness and ability to meet commitments.

This policy is applicable where the loan activity is a:

New loan application
Loan increase
Any servicing (variation) activity requiring a serviceability assessment

You may also need to refer to other lending policy rules, including but not limited to:

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

2. Rules you must apply

2.1 Policy exclusions

This policy does not apply to a Bridging ICAP loan without an end debt.

2.2 Customer commitments

To ensure we accurately assess our customer's financial position we need to:

Collect information about their commitments.
Verify the details of the commitment, refer to:
- Confirm the details of the commitment
- Financial hardship arrangement check and evidence satisfactory repayment history

2.3 Conflicting information

Further investigation may be required if we have identified any conflicts between any information (including Comprehensive Credit Bureau Report (CCR) data where applicable) and other supporting documents provided by the applicant. Refer to Loan Application and Approval > Validation of information provided by the customer

In addition to the Commitments policy requirements, Brokers are reminded to complete the scrutiny activity as outlined in Loan Application and Approval > Validation of information provided by the customer

2.4 Confirm the details of the commitment

Verification task

Additional information

Confirm the details of the commitment

This activity contributes to the accuracy of our serviceability calculation, making sure we have correct details of outstanding balances and or limits and or repayment amounts.

Each commitment type within the 'Confirm commitment details' section of this policy outlines:

the mandatory details we must verify,
acceptable documents we can use,
any allowable variances for each commitment type

You can use the links below to navigate to the specific commitment type or scroll down the page to see the commitments listed in alphabetical order.

Common liability types
Other liability types
Liabilities with amendments required before Unconditional Approval
Non-discretionary expenses requiring verification

Note: Post Unconditional approval, account / Bpay details may be required if they aren't included in the documents used for verification of the commitment, in order to make the payment into any liabilities being cleared and closed or reduced using loan funds.

Refinance is where some or all of the loan funds are being advanced to repay and refinance debts currently with Westpac (WBC), St George Bank Group and/or other financial institutions. This may involve a new loan or could include an increase on an existing loan to repay other debts, i.e. where an existing debt is being:

Cleared
Refinanced
Limit reduced

Note: You can use the links in the tables below to navigate to the specific commitment type or scroll down the page to see the commitments listed in alphabetical order

Common Liability Types
Commitment type (alphabetical order)	Buy Now Pay Later Credit Cards Mortgages Personal Loans If the commitment type is not listed above, refer to : Other liability types Liability types with amendments to be completed prior to unconditional approval Non-discretionary expenses requiring verification
Acceptable Documents	Please click here for a list of acceptable supporting documents
Allowable Variances	Please click here for a list of allowable variances between the application serviceability assessment and the information detailed on the supporting documents
Commitment Conduct	For a details of conduct verification requirements, refer to: Not on CCR - Verifying repayment history when not using CCR

Other Liability Types:
Commitment type (alphabetical order)	Business Loan Centrelink debt Commercial Bill Hire Purchase Lease Line of Credit (unsecured / non-mortgage) Margin loan MyBenefits Staff Loans Other Overdraft (unsecured / non-mortgage) Study and Training and Support Loans (includes HELP, SSL, ABSTUDY SSL, TSL, SFSS) Tax (Note: not contained on CCR) If the commitment type is not listed above, refer to: Common liability types Liability types with amendments to be completed prior to unconditional approval Non-discretionary expenses requiring verification
Acceptable Documents	Please click here for a list of acceptable supporting documents
Allowable Variances	Please click here for a list of allowable variances between the application serviceability assessment and the information detailed on the supporting documents

Liability types with amendments to be completed prior to Unconditional Approval:
Commitment Type (alphabetical order)	Any liability which has been amended to reflect it will be cleared and closed independently by the customer (not using loan funds) prior to unconditional approval Any lability which has been amended to reflect it will be reduced independently by the customer (not using loan funds) prior to unconditional approval
Acceptable Documents	Please click here for a list of acceptable supporting documents
Allowable Variances	Please click here for a list of allowable variances between the application serviceability assessment and the information detailed on the supporting documents

Non-discretionary expenses requiring verification:
Commitment Types (alphabetical order)	Outgoing alimony (spousal support) Outgoing board Outgoing child support (maintenance) Outgoing rent Note : In OBP the above are categorised as expenses, refer to Living Expenses policy > Expense category table

Alphabetical listing

Business Loan
What type of Business Loan is being verified?	Business Loan secured by residential mortgage (includes Business Term loan or Business Overdraft) Business loan not secured by residential mortgage (including unsecured business loans, business loans secured by commercial properties at time of application, business overdraft)

Business Loan secured by residential mortgage (includes Business Term loan or Business Overdraft)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Limit
	Not on CCR	Limit
Non-Refinance	On CCR	Limit Interest rate Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) The below items are not mandatory to be verified but must be verified if evident on the supporting document: Loan term/s (e.g. IO remaining term / total remaining term) Repayment method (e.g. P&I, IO)
	Not on CCR	Same as Non-Refinance > On CCR

Business Loan not secured by residential mortgage (includes unsecured business loans, business loans secured by commercial property at time of application, business overdraft)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Balance
	Not on CCR	Balance
Non-Refinance	On CCR	Balance or Limit Minimum payment Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Same as Non - Refinance > On CCR

Buy Now Pay Later
What type of Buy Now Pay Later is being verified?	Buy Now Pay Later from providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Buy Now Pay Later other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Fixed Term Revolving Term

Buy Now Pay Later from 62 Day providers: Afterpay Laybuy Sezzle Deferit PayPal Payin4 Klarna PayItLater StepPay
Also see: Financial hardship arrangement check and evidence satisfactory repayment history
Refinance	Ineligible for refinance
Non-Refinance	On CCR	Not applicable (no mandatory to verify requirement)
	Not on CCR	Not applicable (no mandatory to verify requirement)

Buy Now Pay Later from providers other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Fixed Term
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents Refer to Glossary
Refinance	Ineligible for refinance
Non-Refinance	On CCR	In all cases for each commitment / order: Balance Minimum payment In addition to the above if the facility is to be excluded from serviceability and the contracted clearance date is after Unconditional approval but prior to drawdown / settlement, refer to Serviceability Assessment > Rules > Amended current commitment
	Not on CCR	In all cases for each commitment / order: Balance Minimum payment In addition to the above if the facility is to be excluded from serviceability and the contracted clearance date is after Unconditional approval but prior to drawdown / settlement, refer to Serviceability Assessment > Rules > Amended current commitment

Buy Now Pay Later from providers other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Revolving Term
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents Refer to Glossary
Refinance	Ineligible for refinance
Non-Refinance	On CCR	Credit Limit Balance* *Note: if ApplyOnline requires you to input the Balance for serviceability calculations the information may be sourced from the finance application or customer declaration, the balance does not need to be verified.
	Not on CCR	Credit Limit Balance

Centrelink debt
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents Serviceability Assessment > Serviceability Repayment Amount > Centrelink debt
Required	Amount of payment Frequency Balance (not mandatory to be verified but must be verified if evident on the supporting document)

Commercial Bill
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Balance
	Not on CCR	Balance
Non-Refinance	On CCR	Balance Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) Not mandatory to be verified but must be verified if evident on the supporting document Minimum payment
	Not on CCR	Same as Non - Refinance > On CCR

Credit Cards
Credit Card types may include: Credit Cards Store Cards Charge Cards	Cards which do not require full repayment each month Cards which do require full repayment each month (e.g. Amex and Diners) Cards with an active 'Flexible Payment Option (FPO)' limit only (See Glossary for definition of a FPO)

Credit Cards Cards which do not require full repayment each month
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Credit limit
	Not on CCR	Credit limit Also refer to Cards with an active 'Flexible Payment Option (FPO)' Limit Only
Non-Refinance	On CCR	Credit limit Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Credit limit Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) Also refer to Cards with an active 'Flexible Payment Option (FPO)' Limit Only

Credit Cards Cards which do require full repayment each month (e.g. Amex and Diners)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Credit limit (including $0 or blank)
	Not on CCR	If the card has a credit limit Credit limit Also refer to Cards with an active 'Flexible Payment Option (FPO)' Limit Only	If the card does not have a credit limit No limit is to be shown on the supporting document Balance Also refer to Cards with an active 'Flexible Payment Option (FPO)' Limit Only
Non-Refinance	On CCR	Credit limit (including $0 or blank)
	Not on CCR	If the card has a credit limit Credit limit Minimum payment (Not mandatory to be verified but must be verified if evident on the supporting document) If a 'minimum payment due' is shown on the supporting document, the amount due must match the balance shown. If the above requirement is met, we have verified that this is a card which must be paid in full each month. If the above requirement is not met, the commitment is to be verified and serviceability assessed as per 'Cards which do not require full repayment each month' Also refer to Cards with an active 'Flexible Payment Option (FPO)' Limit Only	If the card does not have a credit limit No limit is to be shown on the supporting document Balance Minimum payment (Not mandatory to be verified but must be verified if evident on the supporting document) If a 'minimum payment due' is shown on the supporting document, the amount due must match the balance shown. If the above requirement is met, we have verified that this is a card which must be paid in full each month. If the above requirement is not met, the commitment is to be verified and serviceability assessed as per 'Cards which do not require full repayment each month' Also refer to Cards with an active 'Flexible Payment Option (FPO)' Limit Only

Credit Cards Cards with an active 'Flexible Payment Option (FPO)' limit only A card: without a credit (spending) limit, but with an active Flexible Payment Option limit, e.g. some Amex and Diners cards. FPO means portion of the Cards balance can be paid over an extended period (per a standard card) with the remaining balance to be paid in full Refer Glossary for full details
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	The commitment is to be verified and serviceability assessed as per 'Cards which do not require full repayment each month'.
	Not on CCR	If the card has a credit limit the commitment is to be verified and assessed as per 'Cards which do not require full repayment each month'.	If the card does not have a credit limit No limit is to be shown on the supporting document Balance
Non-Refinance	On CCR	The commitment is to be verified and serviceability assessed as per 'Cards which do not require full repayment each month'.
	Not on CCR	If the card has a credit limit: the commitment is to be verified and serviceability assessed as per 'Cards which do not require full repayment each month'. Flexible Payment Option (FPO) limit (Not mandatory to be verified but must be verified if evident on the supporting document) Note: The Flexible Payment Option (FPO) is used as the card limit to calculate a repayments for serviceability assessment. Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)	If the card does not have a credit limit: No limit is to be shown on the supporting document Balance Flexible Payment Option (FPO) limit (Not mandatory to be verified but must be verified if evident on the supporting document) Note: The Flexible Payment Option (FPO) is used as the card limit to calculate a repayments for serviceability assessment. Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)

Hire Purchase
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Limit
	Not on CCR	Balance
Non-Refinance	On CCR	Limit Contracted repayment amount* Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Balance or Limit (not mandatory to be verified but must be verified if evident on the supporting document) Contracted repayment amount* Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
*If the contracted repayment amount is not explicitly detailed on the document, but the document does explicitly detail: Actual payments made to the account over a period of a month, then the actual payments made can be used as the 'contracted repayment amount', if the repayment history is satisfactory (as per 'Evidence satisfactory repayment history')

Line of Credit (unsecured / non-mortgage)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Credit Limit
	Not on CCR	Credit Limit or Balance (one or the other, depending on what is available on the supporting document)
Non-Refinance	On CCR	Credit Limit Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Same as Non-Refinance > On CCR

Lease
What type of Lease is being verified? Please see Glossary for definition of a Novated Lease	Novated lease (salary packaged / salary sacrificed) Non-novated lease

Novated Lease (salary packaged/salary sacrifice)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents
Refinance	Ineligible for Refinance - clearing or reducing using loan funds (including Westpac group products) Refer to Serviceability Assessment policy > Frequently asked questions for further information.
Non-Refinance	On CCR	Contracted repayment amount for the finance portion of the lease Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Same as Non-Refinance > On CCR Same as Non-Refinance > On CCR

Lease Non-Novated
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Balance, being the lease payout amount. Note: If not detailed on the document, the balance plus the balloon (or residual) amount may be used as the verified lease payout amount or the lease payout can be verified using a 'Credit Contract' confirming the balloon (residual) amount.
	Not on CCR	Same as Refinance > ON CCR
Non-Refinance	On CCR	Contracted repayment amount for the finance portion of the lease Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Same as Non-Refinance > On CCR

Margin Loan
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	Not eligible for refinance
Non-Refinance	On CCR	Balance Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) The below items are not mandatory to be verified but must be verified if evident on the supporting document: Limit Notes: If there is only one limit displayed on the document, this limit is to be used If there are multiple limits displayed on the document: 2a. Ignore/disregard any ‘Future limits’ which depend on the purchase of shares, sale of shares or change in LVR of securities, then 2b. Use the lowest of the remaining limits (noting that only one limit could be left remaining)
	Not on CCR	Same as Non-Refinance > On CCR

Mortgages (Including Home Loan or investment loan products (may be Principle and Interest or I/O), Overdraft (mortgage / secured), Line of Credit (mortgage / Secured)
What type of Mortgage is being verified?	Mortgage Mortgage being treated as an Excluded Mortgage liability

Mortgages (Including Home Loan or investment loan products (may be Principal and Interest or I/O), Overdraft (mortgage / secured), Line of Credit (mortgage / secured)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance^#	On CCR	Credit limit
	Not on CCR	Credit limit
Non-Refinance^#	On CCR	Credit limit Interest Rate Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) The below items are not mandatory to be verified but must be verified if evident on the supporting document: Loan term/s (e.g. IO remaining term / total remaining term) Repayment method (e.g. P&I, IO)
	Not on CCR	Credit limit Interest rate Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) The below items are not mandatory to be verified but must be verified if evident on the supporting document: Loan term/s (e.g. IO remaining term / total remaining term) Repayment method (e.g. P&I, IO)
^#Additional requirement for all scenarios (Refinance or non-refinance)		If the product is a Bridging / Relocation loan Refer to Process to follow > 'When creating a liability in ApplyOnline' for specific system entry requirements for Bridging loans No lending or approval (including ‘In Principle Approval’) is available if the Bridging Loan is not being cleared using loan funds (refinance) or customer funds prior to drawdown of new loan (non-refinance). If non-refinance must meet requirements for ‘Mortgages being treated as an Excluded Mortgage Liability’ If the product is NOT a Bridging / Relocation loan If the limit is not explicitly detailed on the document, but a document does explicitly detail: Balance, and An amount for 'available funds/redraw/payments in advance' (i.e. an amount for extra payments the customer has made above their contracted repayment), then The balance plus the amount of 'available funds/redraw/payment in advance' will be treated as the verified limit

Mortgages being treated as an Excluded Mortgage Liability (Including Home Loan or investment loan products (may be Principal and Interest or I/O), Overdraft (mortgage / secured), Line of Credit (mortgage / Secured)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	Ineligible for Refinance
Non-Refinance Mortgage liability is being cleared independently by the customer via property sale, after Unconditional Approval but prior to, or simultaneously with drawdown/settlement of 'this loan'.	On CCR	Accept details of the commitment obtained from CCR (e.g. limit). No further mandatory information to be obtained as the facility is to be repaid prior to settlement of 'this loan'. Evidence of clearance and closure is required after Unconditional Approval but prior to drawdown/settlement booking Must also refer to Refer to Serviceability Assessment policy > Rules > Excluded Mortgage Liability and complete any additional policy requirements.
	Not on CCR	Accept the customer declared commitment details (e.g. limit) No further mandatory information to be obtained as the facility is to be repaid prior to settlement of 'this loan'. Evidence of clearance and closure is required after Unconditional approval but prior to drawdown/settlement booking Must also refer to Refer to Serviceability Assessment policy > Rules > Excluded Mortgage Liability and complete any additional policy requirements.

MyBenefits Loan (Westpac Group Staff)
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents
Refinance	Ineligible for Refinance
Non-Refinance	On CCR	Not Applicable
	Not on CCR	Salary deduction repayment amount

Other
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances. Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	Ineligible for refinance
Non-Refinance	On CCR	Balance or Limit Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Same as Non-Refinance > On CCR

Overdraft (unsecured / non-mortgage)
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Credit Limit
	Not on CCR	Credit Limit
Non-Refinance	On CCR	Credit Limit Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule)
	Not on CCR	Same as Non-Refinance > On CCR

Personal Loans
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	On CCR	Credit Limit
	Not on CCR	Credit Limit or Balance (one or the other, depending on what is available on the supporting document) Note: Where a balloon payment is applicable and the credit limit is not detailed on the document, the balance plus the balloon amount may be used as the verified loan payout amount or the loan payout can be verified using a ‘Credit Contract’ confirming the balloon amount.
Non-Refinance	On CCR	Credit Limit Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) Balloon payment (only where an amount > $0 has been entered in AOL)
	Not on CCR	Credit Limit or Balance (one or the other, depending on what is available on the supporting document) Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule) Balloon payment (only where an amount > $0 has been entered in AOL) The below item is not mandatory to be verified but must be verified if evident on the supporting document: Remaining loan term

Study and Training and Support Loans (includes HELP, SSL, ABSTUDY SSL, TSL, SFSS)
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents
Refinance	Ineligible for Refinance
Non-Refinance	On CCR	Not Applicable commitment type not contained on CCR
	Not on CCR	These commitments are confirmed and verified internally based on the income level of the recipient. Refer to Serviceability Assessment > Serviceability Repayment Amount Note: The commitment must be recorded in ApplyOnline even if the income level if insufficient to trigger a repayment amount.

Tax
What type of Tax is being verified? Refer to Glossary for definitions of the different Tax commitments	Tax Bill Tax Debt - Type A Tax Debt - Type B

Tax Bill
Refer to Glossary for definition

Required

As the payment is not due (it is a bill not a debt), a tax bill is not treated as a commitment.

Where the customer advises you they have a Tax Bill not yet due, or your supporting document (e.g. ATO NOA) indicates an amount due on a future date:

During the discussion with the customer, record in ApplyOnline notes the discussion you have with the customer as to how they will meet the future ATO bill by the due date.
Amount is not included as an outgo in ApplyOnline. You are not required to obtain further supporting documents to evidence of how the future bill will be paid.

Tax Debt Type A
Refer to Glossary for definition

The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances

Also see:

Liabilities and Commitments exempt from financial hardship arrangement or conduct checks
Acceptable documents
Serviceability Assessment > Rules > Payment amount used for serviceability details the payment amount which can be entered into the loan assessment system

Required

Amount of payment
Frequency
Balance (not mandatory to be verified but must be verified if evident on the supporting document)

Note:

Follow existing processes and procedures to ensure that Tax File Numbers (TFNs) are redacted as per Tax file numbers on Bank Files.

Tax Debt Type B Refer to Glossary for definition
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents
Required	Tax Debt-Type B is not to be entered as a commitment (liability) in ApplyOnline No lending or approval (including In Principle Approval) is available until all of the below are met: Tax debt - Type B: Has been repaid via method A or B below; or Is being repaid via method C below, and The associated verification requirements have been met Comments have been entered in the 'Inquiry Outcome' field under additional details explaining how the Tax Debt - Type B was incurred, why it was not paid on time, why the situation will not re-occur, the method used to repay the debt (A, B, C) The application has been referred to Credit and Credit have approved the application for processing
Repayment method		Verification requirement
A	The customer has repaid the debt using own funds, and Comments have been entered in the 'Inquiry Outcome' field under additional details confirming that the funds used to repay the debt were not required as a customer contribution toward this loan transaction	Account statement or account transaction listing or account summary / extract / overview evidencing the payment from the borrower's account to the Taxation Office, and Australian Taxation Office Letter evidencing the debt is repaid; or Australian Taxation Office Portal Document evidencing the debt is repaid
B	The customer has repaid the debt using funds borrowed from another channel or institution; and The new debt has been entered as a liability in ApplyOnline.	Complete verification according to type of new debt. Refer to the specific commitment type within Confirm details of the commitment; and Australian Taxation Office Letter evidencing the debt is repaid; or Australian Taxation Office Portal Document evidencing the debt is repaid
C	The customer has entered into a formal payment plan with the Taxation Office (i.e. the tax debt is now a 'Tax Debt-Type A'); and The 'Tax Debt-Type A'), has been entered as a liability in ApplyOnline.	As per 'Tax Debt -Type A' within Confirm details of the commitment

Liability types with amendments to be completed prior to Unconditional Approval:
Commitment Type (alphabetical order)	Any liability which has been amended to reflect it will be cleared and closed independently by the customer (not using loan funds) prior to unconditional approval Any liability which has been amended to reflect it will be reduced independently by the customer (not using loan funds) prior to unconditional approval

Any liability which has been amended to reflect it will be cleared and closed independently by the customer (not using loan funds) prior to unconditional approval
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	Ineligible for Refinance
Non-Refinance	On CCR	See specific commitment type for mandatory requirements (standard policy applies); and Evidence of clearance and closure is required prior to Unconditional Approval - refer to Serviceability Assessment policy > Rules > 'Amended current commitment' and complete any additional policy requirements
	Not on CCR	Same as Non-Refinance > On CCR

Any liability which has been amended to reflect it will be reduced independently by the customer (not using loan funds) prior to unconditional approval
The commitment details entered into the loan assessment system (e.g. ApplyOnline, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Financial hardship arrangement check and evidence satisfactory repayment history Acceptable documents
Refinance	Ineligible for Refinance
Non-Refinance	On CCR	See specific commitment type for mandatory requirements (standard policy applies); and The post reduction position must be evidenced prior to unconditional approval. Refer to Serviceability Assessment policy > Rules > 'Amended current commitment' and complete any additional policy requirements
	Not on CCR	Same as Non-Refinance > On CCR

Non-discretionary expenses requiring verification:
Commitment Type (alphabetical order)	Outgoing alimony (spousal support) or child support (maintenance) Outgoing board Outgoing rent Note: the above commitment types are not contained on CCR.

Outgoing alimony (spousal support) or child support (maintenance)
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances. Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents
Required	Amount of payment Frequency

Outgoing board Refer to Glossary for definition of a boarder
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances. Also refer to: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents Note: Exclusion of actual rent/board outgo or notional rent is only available under limited circumstances. Refer to Serviceability Assessment > Rules you must apply > Notional Rent Expense
Scenario	Applicable when: The borrower will not be residing in the security collateral after purchase or drawdown¹
Outgoing board Amount of board declared is > $0 and is not paid in cash	Supporting documents are required and must confirm: Amount of payment Frequency
Outgoing board Amount of board declared is $0; or is paid in cash AND Borrower does not live with parents AND Borrower does not live in their spousal partner's owner-occupied home	Supporting documents are required and must confirm: Amount of payment Frequency
Outgoing board Amount of board declared is $0 or; is paid in cash AND Borrower is living with parents; or Borrower is living in their spousal partners home, but they are not an owner of the property and the spouse is a co-borrower or income guarantor (WBC only) on the loan	Accept customer declared outgo where amount is paid in cash: Amount of payment Frequency Supporting documents are not required Brokers / assessors must: Confirm the borrowers living arrangement, and Record in the application notes that the board outgo cannot be verified by the standard list of documents because: the amount paid is zero; or the board is paid in cash
Outgoing board Amount of board declared is $0; or is paid in cash AND Borrower is living in their spousal partners home, but they are not an owner of the property and the spouse is not a co-borrower or income guarantor (WBC only) on the loan.	Accept customer declared outgo where amount is paid in cash: Amount of payment Frequency Supporting documents are required and must confirm: details of the residential property the spouse / de facto owns; and matches the borrower’s current residential address Brokers must confirm and record in the loan application notes: The borrowers living arrangement, The spouse / de facto partner’s name as advised by the applicant, The reason the board outgo cannot be verified by the standard list of documents is because: the amount paid is zero, or the board is paid in cash.
¹Does not apply to construction loans where the borrower will be residing in the security collateral upon completion of construction, but the security collateral cannot be selected as the residential address at settlement within ApplyOnline. Application comments must detail that the borrower will be residing in the security collateral upon completion of construction.

Outgoing Rent Refer to Glossary for definition of a renter
The commitment details entered into ApplyOnline must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents Note: Exclusion of actual board outgo or notional rent is only available under limited circumstances. Refer to Serviceability Assessment> Rules you must apply > Notional Rent Expense
Scenario	Applicable when: The borrower will not be residing in the security property after purchase or drawdown¹
Outgoing rent	Supporting documents are required and must confirm: Amount of payment Frequency
¹Does not apply to construction loans where the borrower will be residing in the security upon completion of construction, but the security cannot be selected as the residential address at settlement within ApplyOnline. Application comments must detail that the borrower will be residing in the security upon completion of construction.

2.5 Financial hardship arrangement check and evidence satisfactory repayment history

Verification task	Additional information
Financial hardship arrangement check Identifying and reviewing performance of formal financial hardship arrangements	Where a borrower is experiencing difficulty paying their current commitments, they may enter into formal financial hardship arrangements with a credit or finance provider. Poor conduct may occur even where such arrangements are in place. Identifying and reviewing performance of formal financial hardship arrangements applies to active commitments held by borrowers and / or income guarantors (WBC only) which are listed on the CCR bureau report. You are required to manually obtain and review the PDF version of the CCR bureau report to identify if the customer is specifically in temporary relief or has a deferral financial hardship arrangement in place and they are operating within the agreed arrangements. This check is not required where policy does not require a CCR to be generated. E.g. for a Servicing (Variation) activity where no CCR is required to be generated. The ‘financial hardship arrangement check’ policy applies to commitments held with both the Westpac Group or external¹ parties for each commitment type which appears on the CCR and tells us how to complete a financial hardship arrangement check. An application where a borrower and / or income guarantors are in temporary relief or a deferral financial hardship arrangement is in place may be referred to Credit for consideration if mitigants and additional supporting documents are provided. For example, details of the formal financial hardship arrangement. You can use the links below to navigate to the specific commitment type or scroll down the page to see the commitments listed in alphabetical order. Each commitment type will set out the requirements for verification. Liability and Commitment Types : Refinance permitted Refinance not permitted Liabilities and Commitments that are exempt from Financial Hardship Arrangement checks or Conduct checks CCR Financial Hardship Arrangement criteria ‘Evidence satisfactory repayment history’ is a separate verification activity. You must also comply with the associated rules below.
Evidence satisfactory repayment history	A review of historical account conduct forms a key component of the Westpac unsuitability assessment. Unsatisfactory conduct can be a sign an applicant is experiencing hardship in managing their current debt commitments. Verification of conduct applies to active commitments held by borrowers and/or income guarantors (WBC only). If the commitment has been operating for less than the specified time frame, conduct is to be assessed from the date the commitment was established. The 'Evidence satisfactory repayment history' check policy applies to commitments held with both the Westpac Group or external parties¹ for each commitment type and tells us: when and how to complete a repayment history check what represents 'satisfactory' repayment history the time period we need to review You will need to refer to the 'Not on CCR - Verifying repayment history when not using CCR' rules where any of the below apply: the commitment is not displayed on the CCR repayment history demonstrated on CCR is blank a commitment has recently been approved but is not yet open or has been open for less than 1 month policy specifies that the 'Not on CCR' process / policy is to be followed policy does not require a CCR to be generated You can use the links below to navigate to the specific commitment type or scroll down the page to see the commitments listed in alphabetical order. Each commitment type will set out the minimum requirements for verification and includes the minimum acceptable documents. Liability and Commitment Types : Refinance permitted Refinance not permitted Liabilities and Commitments exempt from financial hardship arrangement or conduct checks
¹ For the purpose of this policy, St George Bank Group and RAMS are considered to be external providers Note: Post Unconditional Approval, account / Bpay details may need to be supplied if they aren't included in the documents used for verification of the commitment, in order to make the payment into any liabilities being cleared and closed or reduced using loan funds. Refinance is where some or all of the loan funds are being advanced to repay and refinance debts currently with Westpac (WBC), St George Bank Group and/or other financial institutions. This may involve a new loan or could include an increase on an existing loan to repay other debts, iI.e. where an existing debt is being: Cleared Refinanced Limit reduced

Liability and Commitment Types If the commitment type is not listed below in either of the categories ‘Refinance permitted’ or ‘Refinance not permitted’, refer to Liabilities and Commitments exempt from financial hardship arrangement or conduct checks
Refinance permitted	Business Loan secured by residential mortgage (includes Business Term loan or Business Overdraft) Business loan not secured by residential mortgage (includes unsecured business loans, business loans secured by commercial property at time of application, business overdraft) Commercial Bill Credit Cards Cards which do not require full repayment each month Cards which do require full repayment each month Cards with an active ‘Flexible Payment option (FPO)’ limit only Hire Purchase Lease – non-novated lease Line of Credit (unsecured / non-mortgage) Mortgages (including Home Loan or investment loan products, may be principle and interest or interest only (IO), Overdraft (mortgage / secured), Line of Credit (mortgage / secured)) Overdraft (unsecured / non-mortgage) Personal loans
Refinance not permitted	Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Buy Now Pay Later commitments from providers other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Fixed Term Revolving Term Margin loans Mortgages being treated as an Excluded Mortgage Liability (including Home Loan or investment loan products, may be principle and interest or interest only (IO), Overdraft (mortgage / secured), Line of Credit (mortgage / secured)) Other
Acceptable Documents	Please click here for a list of acceptable supporting documents
Allowable Variances	Please click here for a list of allowable variances between the application serviceability assessment and the information detailed on the supporting documents
Commitment Conduct	For a details of conduct verification requirements, refer to: Not on CCR - Verifying repayment history when not using CCR

Refinance permitted - financial hardship arrangement check and evidence satisfactory repayment history Also see: Confirm details of the commitment Acceptable documents Allowable variances
Commitment type: Business Loan secured by residential mortgage (includes Business Term loan or Business Overdraft) Business loan not secured by residential mortgage (includes unsecured business loans, business loans secured by commercial property at time of application, business overdraft) Commercial Bill Credit Cards Cards which do not require full repayment each month Cards which do require full repayment each month Cards with an active ‘Flexible Payment option (FPO)’ limit only Line of Credit (unsecured / non-mortgage) Mortgages (including Home Loan or investment loan products, may be principle and interest or interest only (IO), Overdraft (mortgage / secured), Line of Credit (mortgage / secured)) Overdraft (unsecured / non-mortgage) Personal loans See separate rows for: Hire Purchase Lease – non-novated lease	Refinance	On CCR	Financial hardship arrangement check Where a formal arrangement has been entered into, the financial hardship information is reported over the last 12 months for commitments on the CCR The Bank will review the CCR to identify if the borrower / income guarantor had a formal financial hardship arrangement in place If the commitment does not display FHI data, or the application is being referred to Credit, proceed to Evidence Satisfactory Repayment History to the right	Evidence satisfactory repayment history For commitments listed on CCR the repayment history is assessed over: the last 24 months where bureau score is < 600 12 months where the bureau score is > = 600
		Not on CCR	Obtain the supporting documents as per ' Acceptable Documents ' Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage insured loans: Last 6 months' loan statements for Mortgages and Business Loans which are secured by residential security collateral Last 3 months loan statements for all other liability / commitment types Non Mortgage insured loans Last 3 months' loan statements
	Non-Refinance	On CCR	Same as Refinance > On CCR
		Not on CCR	Obtain the supporting documents as per 'Acceptable Documents' Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage insured and Non-Mortgage insured loans: Last 3 months' loan statements if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule, otherwise: Last 1 month's loan statements
Commitment type: Hire Purchase	Refinance	On CCR	Financial hardship arrangement check Same as Commitment type > Business Loan secured by residential mortgage (etc) > Refinance > On CCR		Evidence satisfactory repayment history Same as Commitment type > Business Loan secured by residential mortgage (etc) > Refinance > On CCR
		Not on CCR	The repayment history of the Hire Purchase liability is not required to be verified where all other accounts and commitments / liabilities have satisfactory conduct / repayment history. The repayment history of the Hire Purchase liability must be verified where: there is any evidence of unsatisfactory conduct for the applicants other accounts and / or commitments / liabilities; or indicators of unsatisfactory conduct for the hire purchase commitment are evident when reviewing account related documents under 'Loan Application and Approval > Validation of information provided by the customer' (e.g. Account statement / transaction listing / internal system extract or enquiry etc.) Obtain the supporting documents as per 'Acceptable Documents ' Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage Insured and Non-Mortgage insured loans Last 3 months' loan statements
	Non-Refinance	On CCR	Same as Refinance > on CCR
		Not on CCR	The repayment history of the Hire Purchase liability is not required to be verified where all other accounts and commitments / liabilities have satisfactory conduct and repayment history. The repayment history of the Hire Purchase liability must be verified where: there is any evidence of unsatisfactory conduct for the applicants other accounts and/or commitments / liabilities; or indicators of unsatisfactory conduct for the hire purchase commitment are evident when reviewing account related documents under 'Loan Application and Approval > Validation of information provided by the customer' (e.g. Account statement / transaction listing / internal system extract or enquiry etc.) Obtain the supporting documents as per 'Acceptable Documents' Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage Insured and Non-Mortgage insured: Last 3 months' loan statements if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule, otherwise: Last 1 month's loan statements
Commitment type: Lease – non-novated lease	Refinance	On CCR	Financial hardship arrangement check Same as Commitment type > Business Loan secured by residential mortgage (etc) > Refinance > On CCR			Evidence satisfactory repayment history Same as Commitment type > Business Loan secured by residential mortgage (etc) > Refinance > On CCR
		Not on CCR	The repayment history of the non-novated lease liability is not required to be verified where all other accounts and commitments / liabilities have satisfactory repayment history. The repayment history of the non-novated lease liability must be verified where: there is any evidence of unsatisfactory conduct for the applicants other accounts and /or commitments / liabilities; or indicators of unsatisfactory conduct for the non-novated lease commitment are evident when reviewing account related documents under 'Loan Application and Approval > Validation of information provided by the customer' (e.g. Account statement / transaction listing / internal system extract or enquiry etc.) Obtain the supporting documents, any of the below documents may be used to verify satisfactory repayment history: Lease provider's document; or Lease provider's email advice Non-Mortgage insured loans where it: displays payments made; or includes a written confirmation by the lease provider of satisfactory repayment history Mortgage insured loans where it: displays payments made and it meets criteria for an Account Statement refer Minimum Documents Standard Matrix Note: written confirmation of repayment history by the lease provider is not acceptable (e.g. via a letter or email advice) Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage Insured and Non-Mortgage insured loans Last 3 months' loan statements
	Non-Refinance	On CCR	Same as Refinance > on CCR
		Not on CCR	The repayment history of the non-novated lease liability is not required to be verified where all other accounts and commitments / liabilities have satisfactory repayment history. The repayment history of the non-novated lease liability must be verified where: there is any evidence of unsatisfactory conduct for the applicant's other accounts and /or commitments / liabilities; or indicators of unsatisfactory conduct for the non-novated lease commitment are evident when reviewing account related documents under 'Loan Application and Approval > Validation of information provided by the customer' (e.g. Account statement / transaction listing / internal system extract or enquiry etc.) Obtain the supporting documents, any of the below documents may be used to verify satisfactory repayment history: Lease provider's document; or Lease provider's email advice Non-Mortgage insured loans where it: displays payments made; or includes a written confirmation by the lease provider of satisfactory repayment history Mortgage insured loans where it: displays payments made and it meets criteria for an Account Statement refer Minimum Documents Standard Matrix Note: written confirmation of repayment history by the lease provider is not acceptable (e.g. via a letter or email advice) Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage insured and Non-Mortgage insured loans: Last 3 months' loan statements if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule , otherwise: Last 1 month's loan statements

Refinance not permitted - financial hardship arrangement check and evidence satisfactory repayment history Also see: Confirm details of the commitment Acceptable documents Allowable variances
Commitment type: Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay	Refinance	Ineligible for refinance
	Non-Refinance	On CCR	Financial hardship arrangement check Where a formal arrangement has been entered into, the financial hardship information is reported over the last 12 months for commitments on the CCR The Bank will review the CCR to identify if the borrower / income guarantor had a formal financial hardship arrangement in place If the commitment does not display FHI data, or the application is being referred to Credit, proceed to Evidence Satisfactory Repayment History to the right	Evidence satisfactory repayment history For commitments listed on CCR the repayment history is assessed over: the last 24 months where bureau score is < 600 12 months where the bureau score is > = 600
		Not on CCR	Account related documents that are reviewed under the 'Loan Application and Approval > Validation of information provided by the customer' (e.g. Account statement / transaction listing / internal system extract or enquiry etc), must also be reviewed for indicators of unsatisfactory conduct of this commitment. The timeframe for review of this commitment is: Mortgage Insured and Non-Mortgage insured: Where the account related document covers a period of less than 1 month = review the entire period Where the account related document covers a period of more than 1 month = review the latest month
Commitment type: Buy Now Pay Later commitments from providers other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay Fixed Term Revolving Term	Refinance	Ineligible for refinance
	Non-Refinance	On CCR	Financial hardship arrangement check Same as Commitment type Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay > Non-Refinance > On CCR		Evidence satisfactory repayment history Same as Commitment type Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay > Non-Refinance > On CCR
		Not on CCR	Obtain the supporting documents as per ' Acceptable Documents ' Fixed Term Revolving Term Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage Insured and Non-Mortgage insured: Last 1 month's loan statements
Commitment type: Margin loans Other	Refinance	Ineligible for refinance
	Non-Refinance	On CCR	Financial hardship arrangement check Same as Commitment type Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay > Non-Refinance > On CCR		Evidence satisfactory repayment history Same as Commitment type Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay > Non-Refinance > On CCR
		Not on CCR	Obtain the supporting documents as per 'Acceptable Documents' Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below: Mortgage Insured and Non-Mortgage insured: Last 3 months' loan statements if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule, otherwise: Last 1 month's loan statements
Commitment type: Mortgages being treated as an Excluded Mortgage Liability (including Home Loan or investment loan products, may be principle and interest or interest only (IO), Overdraft (mortgage / secured), Line of Credit (mortgage / secured))	Refinance	Ineligible for refinance
	Non-Refinance	On CCR	Financial hardship arrangement check Same as Commitment type Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay > Non-Refinance > On CCR		Evidence satisfactory repayment history Same as Commitment type Buy Now Pay Later commitments from 62 day providers: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay > Non-Refinance > On CCR
		Not on CCR	Repayment history is not required to be verified in this scenario Also see Serviceability Assessment policy > Rules > Commitments > Excluded mortgage liability

2.5.1 Liabilities and Commitments exempt from financial hardship arrangement checks or conduct checks

Liabilities and Commitments exempt from financial hardship arrangement checks or conduct checks
The following liability and commitment types do not require a financial hardship arrangement check or conduct check to be completed. Verification of the liability must be completed as per the Confirm Commitment details section of this policy. These liability and commitment types are not eligible for refinance (clearing or reducing using Loan Funds).
Commitment Type (alphabetical order)	Lease (Novated) MyBenefits Staff Loans Outgoing alimony (spousal support) Outgoing board Outgoing child support (maintenance) Outgoing rent (Note: where outgoing rent is being used to demonstrate genuine savings you must adhere to the policy requirements within Genuine Savings, Equity and Customer Contribution ) Study and Training and Support Loans (includes HELP, SSL, ABSTUDY SSL, TSL, SFSS) Tax Debt and Tax Bill

2.6 Acceptable Documents

Acceptable Documents
All of the below are to be met for supporting documents: Comply with specific rules set out in this policy; and Comply with Document Standards policy; and Can be used on a singularly or in combination with other documentation (including but not limited to Digital documentation and digital media), refer Document Standards policy > Using a combination of documents to complete verification; and Be uploaded into ApplyOnline for verification to be undertaken and also held in the loan file (Note: the CCR does not need to be printed or imaged). Note: Use of Digital documentation, e.g. screen shots and or photo images are acceptable as per - Document Standards policy Assessors, Credit and/or Mortgage Insurers may request additional supporting documents to be obtained for their assessment over and above standard policy requirements in order to satisfy themselves as to the borrower's repayment and credit history. If a loan account has the interest charged to a separate account, the loan account and separate account statements must be held to confirm satisfactory payment. Document requirements listed in this policy are for verifying commitment purposes and additional documentation may be required to complete Requirements and Objectives (R&O) and compliance activities.
Commitment type Section A	Acceptable documents For commitments in 'Section A' CCR may be used as the primary verification method where the: account appears on report and credit provider and account identifier can be matched to the applicant’s report In all cases, where the mandatory information does not appear on CCR, then any of the alternate acceptable documents may be used singularly or in combination. R efer to Document Standards policy > Using a combination of documents to complete verification .
Business Loan Buy Now Pay Later - Revolving Term Commercial Bill Credit Cards Hire Purchase Line of Credit (unsecured / non-mortgage) Margin loan Mortgages Other Overdraft (unsecured / non-mortgage) Personal Loans Term Loan	Comprehensive Credit Report (CCR) Can be used to confirm financial hardship arrangements where the commitment is displayed on the report and policy permits use of CCR for this purpose Can be used to confirm details of the commitment where the commitment is displayed on the report and the policy permits the use of CCR for this purpose Can be used to evidence satisfactory repayment history where the commitment is displayed on the report and policy permits use of CCR for this purpose Alternate Acceptable documents where verification is unable to be completed using information from CCR: Account statement Can be used to confirm details of commitment and repayment history Account Statement used in conjunction with an Account Transaction Listing to evidence satisfactory repayment history This combination is used to Evidence satisfactory repayment history when the account statement: Exceeds the maximum age policy and/or; Does not cover the timeframe required to evidence satisfactory repayment history The transaction listing must contain at least one overlapping transaction with the account statement Account summary / extract / overview Can be used to confirm details of the commitment Can be used to evidence satisfactory repayment history where it meets criteria for an Account Statement - refer Document Standards Account transaction listing Can be used to confirm details of the commitment Can be used to evidence satisfactory repayment history where it meets criteria for an Account Statement - refer Document Standards ‘Buy Now Pay Later’ provider document from digital application or internet site Can be used to confirm details of the commitment Can be used to evidence satisfactory repayment history where it displays transaction history / payment schedule Credit Contract Can be used to ‘confirm details of the commitment’ for a: Hire Purchase, or Commitment recently approved or established Must meet Document Standards policy > Credit Contract requirement For credit providers who do not produce loan statements Includes providers who do not issue statement during periods of inactivity. Any of the below can be used to confirm details of the commitment Credit provider's letter Credit provider's email advice The above documents can be used to evidence satisfactory repayment history where the letter or email advice: displays payments made; or includes a written confirmation of satisfactory repayment; or confirms the timeframe over which the account has been inactive Commitment recently approved or established Where the commitment is not yet open or has been open for less than 1 month, any of the below can be used to confirm the details of the commitment: Credit provider's letter Credit provider's email advice Credit Contract Repayment history check will not be required where the letter, email advice or contract confirms: The first payment date has not yet fallen due, refer ‘ Not on CCR – Verifying repayment history when not using CCR '
Commitment type Section B	Acceptable documents The commitments in 'Section B' have specific acceptable document requirements
Buy Now Pay Later - Fixed Term	The below can be used to confirm details of the commitment: 'Buy now, pay later' provider document from digital application or internet site The above documents may also be used to verify satisfactory repayment history where it displays transaction history / payment schedule
Centrelink debt	The below can be used to confirm details of the commitment: Government letter
Lease - Novated (salary packaged / salary sacrificed)	Any of the below documents can be used to confirm details of the commitment: Lease provider's document Lease provider's email advice Salary packaging provider's document Salary packaging provider's email advice Note: If the document does not show that the lease is 'novated', a salary packaging / sacrifice arrangement must be evidenced on a payslip.
Lease - Non-novated	Any of the below documents can be used to confirm details of the commitment: Lease provider's document Lease provider's email advice See Evidence satisfactory repayment history for specific requirements e.g. Refinance Mortgage Insured v's Non-Mortgage Insured / Non-Refinance
MyBenefits Loan (Westpac Staff)	The below can be used to confirm details of the commitment: Payslip
Outgoing alimony (spousal support) or outgoing child support (maintenance)	Any of the below documents can be used to confirm details of the commitment: Court order Government letter Child support assessment extract from myGov portal Account Statement - covering 2 payment cycles with narratives aligned to the commitment Account Transaction listing - covering 2 payment cycles with narratives aligned to the commitment Two consecutive payslips - both evidencing the commitment amount with narratives aligned to the commitment. Higher amount to be used if commitment amount varies across documents, otherwise alternate document is required
Outgoing Board	Amount of board declared is >$0 and is not paid in cash Any one of the below documents can be used to confirm details of the commitment: Account Statement or Account Transaction listing - covering 2 payment cycles with narratives aligned to the commitment
	Amount of outgoing board declared is $0 or; is paid in cash AND Borrower does not live with parents or in their spousal partner's home A Statutory declaration witnessed by appropriate person can be used to confirm details of the commitment. For more information about Statutory declarations, refer to Commitments > Process to follow > Statutory declarations.
	Amount of board declared is $0; or is paid in cash AND Borrower is living in their spousal partner’s owner occupied home, but they are not an owner of the property, and their spouse is a co-borrower or income guarantor (WBC only) on the loan No documentation is required to confirm details of the commitment
	Amount of board declared is $0; or is paid in cash AND Borrower is living in their spousal partner’s owner occupied home, but they are not an owner of the property, and their spouse is not a co-borrower or income guarantor (WBC only) on the loan Any of the below can be used to confirm details of the commitment where the property owner shown matches the spousal partner’s name: Council rates notice; or Utility bill
Outgoing rent	Any one of the below can be used to confirm details of the commitment: Rental / Lease agreement Licensed real estate property manager's / letting agent's letter Licensed real estate property manager's / letting agent's email advice Rental ledger from licensed real estate property manager / letting agent Where the above document types are used: If the document evidence has multiple tenants, the total contracted rent amount may be apportioned equally across all tenants to establish the applicant's portion If the applicant declares a rental outgo amount less than an equal portion also see, Serviceability Assessment policy > Serviceability Repayment Amount > Commitment type table > Rental expense Account Statement - covering 2 payment cycles with narratives aligned to the commitment Account Transaction listing - covering 2 payment cycles with narratives aligned to the commitment
Study and Training and Support Loans (includes HELP, SSL, ABSTUDY SSL, TSL, SFSS)	These commitments are confirmed and verified internally based on the income level of the recipient. Refer to Serviceability Assessment > Serviceability Repayment Amount > Study and Training Support Loans
Tax Debt	Tax Debt - Type A Any one of the below documents can be used to confirm details of the commitment: Australian Taxation Office Letter detailing the payment arrangement Australian Taxation Office Portal Document detailing the payment arrangement
Tax Debt	Tax Debt - Type B See 'Confirm details of the commitment' for specific requirements
Legend
1	For the purpose of this policy the definition of an external commitment includes A loan not sourced from Westpac St George Bank Group and RAMS are considered to be external providers

2.7 Allowable Variances

Allowable Variances
Commitment type	The below variances between the commitment information used within the application serviceability assessment and the information detailed on the supporting document/s are permitted. The variances are acceptable as they result in a more conservative monthly repayment amount being calculated for use within the serviceability assessment, or do not impact the calculated monthly repayment.
Buy Now Pay Later Business Loan Centrelink debt Commercial Bill Credit Cards Hire Purchase Lease Line of Credit (unsecured / non-mortgage) Margin loan Mortgages MyBenefits Loans Other Overdraft (unsecured / non-mortgage) Personal Loans Tax Debt Type A Term Loan	Limit	The supporting document evidences a lower limit than the value entered into the assessment system / used for the monthly repayment calculation
	Balance	The supporting document evidences a lower balance than the value entered into the application / used for the monthly repayment calculation or; Applies only where limit is mandatory to be verified: the supporting document evidences a higher balance than the value entered the application / used for the monthly repayment calculation. The balance on supporting document must be less than or equal to the limit entered the assessment system / used for the monthly repayment calculation
	Interest rate	Applies where the commitment type has not been negatively geared (e.g. no interest deduction has been applied for the specific debt to the serviceability calculation) The supporting document evidences a lower interest rate then the value entered the assessment system / used for the monthly repayment calculation Does not apply where the commitment is a mortgage that has been negatively geared or where an interest deduction (for the specific debt) is being applied to the serviceability calculation. Including when the commitment is a company commitment or a trust with corporate trustee. In these scenarios the actual interest rate on the supporting document must be the same as the value entered in the assessment system to ensure we accurately reflect the negative gearing / interest deduction.
	Repayment type	The supporting document evidences a principal and interest (P&I) repayment method but an interest only (I/O) remaining term has been included in the assessment system / used for the monthly repayment calculation
	Remaining term	The supporting document evidences an interest only (I/O) remaining term and/or total remaining term which differs to the value included in the assessment system / used for the monthly repayment calculation The difference must be less than or equal to two months
	Minimum Payment	The supporting document evidences a lower minimum payment than the value entered in the assessment system

2.8 Time Frame / Age of document definition

When calculating if the document meets the required timeframe or age of document requirements the following definitions are to be used:

The definition of 1 month is	The first day of the month up to and including the last day of the same month (e.g. 1/1/2018 to 31/1/2018) or Any day in the first month up to and including one day prior in the next month (e.g. 15/1/2018 to 14/2/2018)
The definition of 2 months is	The first day of month up to and including the last day of the following month (e.g. 1/1/2018 to 28/2/2018) or Any day in the first (given) month up to and including one day prior in the following second month (e.g. 15/1/2018 to 14/3/2018)
The same methodology may be extrapolated out to any higher number of months.

2.9 Not on CCR - Verifying repayment history when not using CCR

Supporting documents must be obtained:

where a commitment is not yet open or has been open for less than 1 month to confirm repayments are not due yet*; or
to establish repayment history where the:
- commitment type is not displayed on the Comprehensive Credit Report (CCR) and the liability or commitment is not exempt from financial hardship arrangement checks or conduct checks; or
- commitment is on CCR but the current, 2^nd and 3^rd months display all R and / or P special values and repayment history cannot be established using CCR alone.

*No further repayment history checks (or financial hardship arrangement checks) are required where the supporting document confirms the first payment date has not yet fallen due, refer Acceptable Documents > commitment type > Commitment recently approved or established .

Notes:

If the commitment has been operating for less than the specified time frame, conduct is to be assessed from the date the commitment was established

Commitment type

Repayment history is considered unsatisfactory when:

What do I need to do?

"Buy Now Pay Later' Commitment from providers:

Afterpay
Laybuy
Sezzle
Deferit
PayPal Payin4
Klarna
PayItLater
StepPay

Supporting document shows evidence of direct debit/s to the provider which are returned / reversed / dishonoured / rejected

In all cases where unsatisfactory conduct is evident:

the balance of the facility is to be verified (if the application is to proceed). Note: You may need to obtain an additional supporting document to verify the balance. Refer to Acceptable documents > commitment type table
If the most recent account balance evidenced is > the commitment limit, then:
- The most recent account balance is to be updated in the origination platform; and
- Serviceability is to be assessed using the most recent balance (where applicable for debts that use the higher of either the balance or limit for serviceability assessment.) Refer to Serviceability Assessment > Commitments > Serviceability repayment amount > Type of commitment

Also see:

Document Standards:
- Minimum Document Standards
- Age of documents

For all other commitment types

Supporting document shows evidence of:

Arrears (may be in the form of statement messages, late fees, legal fees, default interest, etc.)
Cheque dishonours
Payment reversals
Overdue payments
Limit exceeded or over limit fees being charged

3. Process to follow

3.1 Statutory Declarations

Westpac Group staff are not to witness statutory declarations, when that declaration relates to a loan application or other Westpac loan variation activity. In these scenarios, a statutory declaration should be witnessed only by an authorised person as listed in the government website statutory declarations (excluding Westpac Group staff). This website includes links to information for each state. To enquire about statutory declarations in your state or territory, contact the relevant department below:

New South Wales - Department of Justice
Northern Territory - Department of the Attorney-General and Justice
Queensland - Department of Justice and Attorney-General
South Australia - Attorney-General's Department
Tasmania - Department of Justice
Victoria - Department of Justice and Regulation
Western Australia - Department of the Attorney General.

Where the above websites allow a witness by a Westpac Group staff member, only witness the statutory declaration when it is not related to a Westpac Group loan application or loan variation activity.

4. Frequently asked questions

Question	Answer
Are regular Chrisco payments (and other similar hamper scheme arrangements) to be captured as a living expense or a commitment?	Capture as an expense. Chrisco and other hamper schemes are like a lay-buy as you have to buy your goods before you get them and can cancel the order. In that way they are different from a credit card and buy now pay later schemes like AfterPay and ZipPay.
How do I know if a card needs to be repaid in full each month?	If the minimum payment due is equal to the closing balance, the card must be paid in full.
Are Layby payments to be captured as a living expense or a commitment?	Capture as an expense. They are different from a credit card and short term buy now pay later schemes as you have to pay for your goods in full before you receive them. Note: There is also a 'Buy Now Pay Later' facility name "Laybuy" which needs to be loaded as a commitment (not an expense).
When using an account statement for verification, do I need every page issued for that statement?	No You only need the pages which: Display the information you are verifying, and Enable you to comply with the Minimum Document Standards for an account statement
If a tax bill was due prior to the Responsible Lending Start Date, do I need to ask the customer if the bill was paid or provide evidence that it was paid?	There is no requirement to make enquiries about or evidence payment of that bill, unless other application information suggests that the payment was not made (i.e the Tax bill has become a Tax debt)
My customer pre-pays tax expected to be payable for the current tax year. E.g. they make PAYG Instalments. Do I need to include this as a Tax Debt?	No. Pre-payment of tax is not considered to be a tax debt
The customer has advised that they don't have a tax bill or tax debt overdue. Do I need to undertake further enquiries or verification activity?	There is no requirement to undertake further verification or evidence the current status of the customer's tax payments, unless other application information suggests that the payment was not made (i.e the Tax bill has become a Tax debt)
Do I always need to get a statement to verify the details of the commitment and the repayment history of the account?	No, you may use a combination of documents, provided the documents or systems used fulfil the policy requirements. For example, if policy requires that you verify : 1) Loan Limit: 2) Loan Interest Rate 3) Loan Balance 4) Repayment history If the Comprehensive Credit Report (CCR) provides the limit and repayment history only, a second document will be required to confirm the interest rate and the balance. If the information you need (2 and 3) is contained on an 'account summary/extract/overview' (or any other allowable document), policy has been satisfied and an account statement (or any other document) is not required
What happens if a commitment has been closed, but the customer is still repaying the account?	As an example this could occur where: the customer has voluntarily cancelled a credit card but is still paying back the debt or where the credit card has been revoked and limit cancelled by the card issuer due to poor conduct. You need to need to verify the details of the commitment and include the repayment for serviceability calculations.
I noticed that prior to this loan application the customer had been making payments to a credit card which has not been declared. The customer advised me that the card was closed prior to this loan application. The Comprehensive Credit Bureau Report (CCR) does not display the card as active, and I can't see any payments being made to the card after this loan application. Do I need the customer to provide evidence that the card has been closed?	No. The customer has confirmed that the commitment was not in place at the time of the loan application and there is nothing to indicate a conflict with this information. As such, you may accept the customer's explanation and do not need to obtain evidence of closure. Ensure you record the details of your discussion in application comments.
How can the Bank generate a refreshed Comprehensive Credit Bureau Report (CCR) to evidence that a commitment previously on the report is now closed or has been changed (e.g. the limit has been reduced)?	Automated system rules control when the CCR is refreshed. We are unable to refresh the CCR outside of these controls. An alternate supporting document will be required to evidence the updated commitment position (closure, limit reduction etc.) if the CCR generated by the system does not reflect the closure/change
The Comprehensive Credit Bureau Report (CCR) shows an existing loan facility held jointly by the borrowers on the loan being processed. Do I have to load this existing loan against each borrower in ApplyOnline?	Yes. The existing loan commitment must be included in the serviceability assessment; this must be apportioned against all relevant borrowers.

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

21 November 2021

Added 4 new BNPL providers, PayPal Payin4, Klarna, PayItLater, StepPay.

20 February 2022

Change 1
Updated Hire Purchase and non-novated lease commitments > Not on CCR > Refinance and non-refinance to state that repayment history verification is not required where all of the applicants other accounts and/or commitments / liabilities have satisfactory conduct.
Repayment history for the applicants other commitments / liabilities are as per the specific commitment type mandatory to verify rules.
Repayment history must be verified for either Hire Purchase or non-novated leases if the applicants other accounts and/or commitments / liabilities show evidence of unsatisfactory repayment history, or if the other supporting documents demonstrate evidence of unsatisfactory repayment history when completing the Account Scrutiny activity as per Validation of information provided by the customer.
Change 2
Changes made to > Confirm the details of the commitment > Commitment type > Personal Loans

Non-refinance (on CCR and not on CCR) - Removed the requirement to verify minimum payment.
- Serviceability assessment will be assessed on the higher of customer declared contracted repayment amount or derived repayment amount.
Confirm the details of the commitment > Commitment type > Personal Loans > Refinance > not on CCR – added

Note: Where a balloon payment is applicable and the credit limit is not detailed on the document, the balance plus the balloon amount may be used as the verified loan payout amount or the loan payout can be verified using a ‘Credit Contract’ confirming the balloon amount.

Confirm the details of the commitment > Commitment type > Personal Loans > Non-refinance (on CCR / not on CCR)
- Added the requirement to verify balloon payments, where an amount of > $0 has been entered against this liability in OBP.

Confirm the details of the commitment > Commitment type > Personal Loans > Non-refinance
- Added > The below item is not mandatory to be verified but must be verified if evident on the supporting document:
  - Remaining loan term

3 April 2022

Change 1
Section 2.10 Not on CCR – verifying repayment history when not using CCR
The below content has been changed
In all cases where unsatisfactory conduct is evident:

the balance of the facility is to be verified (if the application is to proceed). Note: You may need to obtain an additional supporting document to verify the balance. Refer to Acceptable documents > commitment type table
If the most recent account balance evidenced is > the commitment limit, then:
- The most recent account balance is to be updated in the origination platform; and
- Serviceability is to be assessed using the most recent balance (where applicable for debts that use the higher of either the balance or limit for serviceability assessment.) Refer to Serviceability Assessment > Commitments > Serviceability repayment amount > Type of commitment

Also see:

Document Standards:
- Minimum Document standards matrix (MDSM)
- Age of documents

22 May 2022

Updated section ‘Frequently Asked Questions’- scenario changed from ‘If a tax bill was due prior to the full application date, do I need to ask the customer if the bill was paid or provide evidence that it was paid?’ changed to ‘If a tax bill was due prior to the Responsible Lending Start Date, do I need to ask the customer if the bill was paid or provide evidence that it was paid?’ Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the’ Responsible Lending Start Date’

17 July 2022

Change 1

Updated section ‘Rules > Confirm the details of the commitment > Buy Now Pay Later’:
- Split existing commitment type ‘Buy Now Pay Later other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay’ into two sub-categories
  - Fixed Term -policy rules are un-changed for these accounts
  - Revolving Term- new policy rules:
    - Ineligible for refinance
    - Details to be verified if on CCR:
      - Credit Limit
      - Balance*
      - * Note: if the origination platform requires you to input the Balance for serviceability calculations the information may be sourced from the finance application or customer declaration, the balance does not need to be verified.
    - Details to be verified if not on CCR:
      - Credit Limit
      - Balance
Updated section ‘Evidence satisfactory repayment history > Buy Now Pay Later’:
- Split existing commitment type ‘Buy Now Pay Later other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay’ into two sub-categories:
  - Fixed Term -policy rules are un-changed for these accounts
  - Revolving Term- new policy rules:
    - Ineligible for refinance
    - Policy rules if on CCR:
      - Repayment history is assessed over the last 24 months for commitments listed on the CCR.
      - Obtain the supporting documents as per ' Acceptable Documents '
        
        Review the supporting documents for indicators of unsatisfactory conduct over time frame indicated below:
        
        Mortgage Insured and Non-Mortgage insured:
        
        Last 1 month's loan statements
        
        Lender / assessor may approve where 'Authority to progress' conditions are met or no un-satisfactory repayment history is demonstrated. Refer to 'Not on CCR - Verifying repayment history when not using CCR'.

Change 2

Renamed 2.5 Evidence satisfactory repayment history to 2.5 Financial hardship arrangement check and evidence satisfactory repayment history
Updated 2.2 Customer commitments
To ensure we accurately assess our customer's financial position we need to:
- Collect information about their commitments.
- Verify the details of the commitment, refer to:
  - Confirm the details of the commitment
  - Financial hardship arrangement check and Evidence satisfactory repayment history
Updated 2.4 Confirm the details of the commitment
- Common liability types table > Commitment Conduct >
  - Added On CCR – CCR financial hardship arrangement criteria
- Renamed all references to Evidence satisfactory history repayment to
  - Also see:
    - Financial hardship arrangement check and evidence satisfactory repayment history
- Renamed all references to Liabilities and Commitments exempt from conduct checks to Liabilities and Commitments exempt from financial hardship arrangement checks or conduct checks
Added new row to 2.5 Financial hardship arrangement check and evidence satisfactory repayment history > Verification task table > Financial hardship arrangement check Identifying and reviewing performance of formal financial hardship arrangements
- Additional information >
- Where a borrower is experiencing difficulty paying their current commitments, they may enter into formal financial hardship arrangements with a credit or finance provider. Poor conduct may occur even where such arrangements are in place.
- Identifying and reviewing performance of formal financial hardship arrangements applies to active commitments held by borrowers and / or income guarantors which are listed on the CCR bureau report.
- You are required to manually obtain and review the PDF version of the CCR bureau report to identify if the customer is specifically in temporary relief or has a deferral financial hardship arrangement in place and they are operating within the agreed arrangements.
- The ‘financial hardship arrangement check’ policy applies to commitments held with both the Westpac Group or external parties1 for each commitment type which appears on the CCR and tells us how to complete a financial hardship arrangement check.
- For internal accounts¹ only, the credit decision will apply additional checks to identify if a borrower and / or income guarantor is in a financial hardship arrangement.
- You can use the links below to navigate to the specific commitment type or scroll down the page to see the commitments listed in alphabetical order. Each commitment type will set out the requirements for verification.
- Common Liability Types
- Other Liability types
- Liabilities and Commitments that are exempt from Financial Hardship Arrangement checks or Conduct checks
- CCR Financial Hardship Arrangement criteria
- ‘Evidence satisfactory repayment history’ is a separate verification activity. You must also comply with the associated rules below.
Updated 2.5 Financial hardship arrangement check and evidence satisfactory repayment history >
- Verification task table > Evidence satisfactory repayment history
- Renamed all references to Liabilities and Commitments that are exempt from Conduct checks to Liabilities and Commitments that are exempt from Financial Hardship Arrangement checks or Conduct checks
- Updated Acceptable conduct – Refinance permitted > Refinance > On CCR >
  Updated Acceptable conduct – Refinance not permitted > Non-Refinance > On CCR >
  Updated Acceptable conduct – Leases >
  - Split into 2 columns
Financial hardship arrangement check
- Where a formal arrangement has been entered into, the financial hardship information is reported over the last 12 months for commitments on the CCR
- The Bank will review the CCR to identify if the borrower / income guarantor had a formal financial hardship arrangement in place
- If the commitment does not display FHI data, or the application is being referred to Credit, proceed to Evidence Satisfactory Repayment History to the right
Renamed Liabilities and Commitments exempt from conduct checks to Liabilities and Commitments exempt from financial hardship arrangement checks or conduct checks
- The following liability and commitment types do not require a financial hardship arrangement check or conduct check to be completed. Verification of the liability must be completed as per the Confirm Commitment details section of this policy.
Updated 2.6 Acceptable Documents
- Acceptable Documents table (Comprehensive Credit Report CCR)
  - Can be used to confirm financial hardship arrangements where the commitment is displayed on the report and policy permits use of CCR for this purpose

Change 3

Updated section ‘Confirm details of the commitment’:
- Outgoing alimony (spousal support) or child support (maintenance) - clarification/ correction only change (no change to policy or risk appetite):
  - Included ‘Living Expenses>Definition of a dependant’ (and link to the Living Expenses’ policy) to the list of ‘also see’ policies

Change 4 – Policy Simplification

Removing the need for Balance Verification on the following commitments:
- Business Loan secured by residential mortgage - Non-Refinance
- Business Loan NOT secured by residential mortgage - Non-Refinance
- Credit Cards (Cards which do not require full repayment each month) Non-Refinance
- Credit Cards (Cards which do require full repayment each month) – Non-Refinance
- Line of Credit (unsecured / non-mortgage) - Non-Refinance
- Lease Novated - Non-Refinance
- Lease Non-Novated - Non-Refinance
- Mortgage - Non-Refinance
- Overdraft (unsecured / non-mortgage) – Non-Refinance
Minimum Repayments to be verified for Commercial Bill – Non- Refinance
Removal of Reducing Commitment Option for Lease Non-Novated Refinance

26 July 2022

Change 1

Updated section ‘Confirm the details of the commitment > Mortgages’:
- to specify that ‘If the product is a Bridging / Relocation loan, no lending or approval (including ‘In Principle Approval’) is available if the Bridging Loan is not being cleared using loan funds (refinance) or customer funds prior to drawdown of new loan (non-refinance). If non-refinance must meet requirements for ‘Mortgages being treated as an Excluded Mortgage Liability’

21 August 2022

Change 1
Impacted section > 2.5 Financial hardship arrangement check and evidence satisfactory repayment history > Evidence Satisfactory repayment history
Old
You will need to refer to the 'Not on CCR' rules where any of the below apply:

the commitment is not displayed on the CCR
repayment history demonstrated on CCR is blank
policy specifies that the 'Not on CCR' process / policy is to be followed
policy does not require a CCR to be generated - e.g. for a Servicing (Variation) activity where no CCR is generated as the activity is not processed using OBP

New
You will need to refer to the 'Not on CCR – Verifying repayment history when not using CCR' rules where any of the below apply:

the commitment is not displayed on the CCR
repayment history demonstrated on CCR is blank
a commitment has recently been approved but is not yet open or has been open for less than 1 month
policy specifies that the 'Not on CCR' process / policy is to be followed
policy does not require a CCR to be generated - e.g. for a Servicing (Variation) activity where no CCR is generated as the activity is not processed using OBP

Change 2
Impacted section > Acceptable documents.
New documents added
Commitment recently approved or established

Where the commitment is not yet open or has been open for less than 1 month, any of the below can be used to confirm the details of the commitment:
- Credit provider's letter
- Credit provider's email advice
- Credit Contract
Repayment history check will not be required where the letter, email advice or contract confirms:

The first payment date has not yet fallen due, refer ‘Not on CCR – Verifying repayment history when not using CCR’

Change 3
Impacted section 2.11 Not on CCR – Verifying repayment history when not using CCR
Added new content
Supporting documents must be obtained:

where a commitment is not yet open or has been open for less than 1 month to confirm repayments are not due yet*; or
to establish repayment history where the:
- commitment type is not displayed on the Comprehensive Credit Report (CCR) and the liability or commitment is not exempt from financial hardship arrangement checks or conduct checks; or
- commitment is on CCR but the current, 2^nd and 3^rd months display all R and / or P special values and repayment history cannot be established using CCR alone.

If the commitment has been operating for less than the specified time frame, conduct is to be assessed from the date the commitment was established

Change 4

For 'Study and Training Support loans’, corrected link and path name under sections ‘Acceptable Documents’ and ‘Confirm details of the commitment’

Change 5
Updated references to the ‘Minimum Document Standards Matrix’.
The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter.
Existing references have been updated to point to the ‘Document Standards’ chapter and/or Minimum Document Standards within the ‘Document Standards’ chapter

2 October 2022

Change 1
Updated section ‘Confirm the details of the commitment’ for ‘Margin Loans (non-refinance)’ to include:
‘The below items are not mandatory to be verified but must be verified if evident on the supporting document:

Limit

Notes:

If there is only one limit displayed on the document, this limit is to be used
If there are multiple limits displayed on the document:
2a. Ignore/disregard any ‘Future limits’ which depend on the purchase of shares, sale of shares or change in LVR of securities, then
2b. Use the lowest of the remaining limits (noting that only one limit could be left remaining)’

Change 2
Impacted section 2.5 Financial hardship arrangement check and evidence satisfactory repayment history:

Refinance permitted - financial hardship arrangement check and evidence satisfactory repayment history
Refinance not permitted - financial hardship arrangement check and evidence satisfactory repayment history

Rules have changed for ‘Evidence satisfactory repayment history’
Old

Repayment history is assessed over the last 24 months for commitments listed on the CCR.

New

For commitments listed on the CCR repayment history is assessed over:
- the last 24 where bureau score is < 600
- 12 months where the bureau score is > = 600

Change 3
Updated section ‘ Why this policy?’:

Included words and link highlighted in bold
- Any servicing (variation) activity requiring a serviceability assessment

20 November 2022

Change 1
Updated section ‘Acceptable Documents’ to include an additional acceptable document type of ‘Credit contract’:
Credit Contract
Can be used to ‘confirm details of the commitment’ for a:

Hire Purchase, or
Commitment recently approved or established

Must meet Document Standards policy > Credit Contract requirement

Change 2
Amended 2.5 Financial hardship arrangement check and evidence satisfactory repayment history > Refinances permitted – financial hardship arrangement check and evidence satisfactory repayment history > Commitment type: > Refinance > On CCR > Financial hardship arrangement check
Same change replicated to 2.5 Financial hardship arrangement check and evidence satisfactory repayment history > Refinances not permitted – financial hardship arrangement check and evidence satisfactory repayment history > Commitment type: > Refinance > On CCR > Financial hardship arrangement check

Change 3
Update to 2.6 Acceptable Documents > Commitment type (Section B) > Outgoing alimony (spousal support) or outgoing child support (maintenance)
New document type added:

Child support assessment extract from myGov portal

20 November 2022

Change 4
Updated section ‘Confirm the details of the commitment’ for Hire Purchase commitments:

To remove the requirement to verify balance where on CCR
For non-refinancing updated wording as follows:

Old wording

Balance
Minimum Payment*
Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expense rule)

*If the minimum payment is not explicitly detailed on the document, but the document does explicitly detail:

Actual payments made to the account over a period of a month, then
the actual payments made can be used as the 'minimum payment', if
the repayment history is satisfactory (as per 'Financial hardship arrangement check and evidence satisfactory repayment history' )

New wording:

Balance or Limit (not mandatory to be verified but must be verified if evident on the supporting document)
Contracted repayment amount*
Number of debtors (only if the commitment has been apportioned under the Serviceability policy > Apportioned shared commitment rule or the Apportioned household expense rule)

*If the contracted repayment amount is not explicitly detailed on the document, but the document does explicitly detail:

Actual payments made to the account over a period of a month, then
the actual payments made can be used as the 'contracted repayment amount', if
the repayment history is satisfactory (as per 'Financial hardship arrangement check and evidence satisfactory repayment history' )

19 February 2023

Change 1
In section 2.4 Confirm the details of the commitment, the sub heading of ‘Other ongoing commitment types’ has been renamed to ‘Non-discretionary expenses requiring verification’
The commitment types in this category include:

Outgoing alimony (spousal support) or child support (maintenance)
Outgoing board
Outgoing rent

Change 2
In section 2.4 Confirm the details of the commitment > Commitment type ‘Tax’ has been moved into the section for ‘Other liability types’
The rules have not changed.

Change 3
Section 2.4 Confirm the details of the commitment, a new commitment type has been added for ‘Centrelink debt’

Centrelink debt Refer to Glossary for definition
The commitment details entered into the loan assessment system (e.g. OBP) must match the information to be verified on the supporting document(s) except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents Serviceability Assessment > Rules > Serviceability Repayment Amount
Required	Amount of payment Frequency Balance (not mandatory to be verified but must be verified if evident on the supporting document)

Change 4
Section 2.4 Confirm the details of the commitment > Commitment type > outgoing board
This section has been changed (the definition has been moved to the Glossary and the wording changed)
Old wording

Outgoing board
Definition of a boarder	Someone who rents part of the premises from: A tenant who also lives there or, The owner of the premises, who also lives there and the tenant or the owner of the property keep control over the whole premises (including the part being rented). They are the landlords
The commitment details entered into the loan assessment system (e.g. OBP) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Evidence satisfactory repayment history > Liabilities and Commitments exempt from financial hardship arrangement checks or conduct checks Acceptable documents Note: Exclusion of actual rent / board outgo or notional rent is only available under limited circumstances. Refer to Serviceability Assessment > Rules you must apply > Notional Rent
Scenario	The borrower will not be residing in the security collateral after purchase or drawdown¹	The borrower will be residing in the security collateral after purchase or drawdown¹	Allowable Accommodation Type in OBP
Outgoing board Amount of board declared is > $0 and is not paid in cash	Obtain supporting documents and confirm: Amount of payment Frequency	Accept customer declared outgo. You are not required to obtain supporting documents.	Rented
Outgoing board Amount of board declared is $0 or; is paid in cash AND Borrower does not live with parents AND Borrower does not live in their spousal partner's home	Obtain Statutory declaration and confirm: Amount of payment Frequency	Accept customer declared outgo. You are not required to obtain supporting documents.	Rented
Outgoing board Amount of board declared is $0 or; is paid in cash AND Borrower is living in their spousal partners home, but they are not an owner of the property and the spouse is an additional borrower on the loan; or Borrower is living with parents	Accept customer declared outgo where amount is paid in cash: Amount of payment Frequency Brokers / assessors must confirm: the borrowers living arrangement; no documentation is required to evidence board outgo, ensure notes record why the board outgo cannot be verified by the standard list of documents or; where the amount paid is zero	Accept customer declared outgo. You are not required to obtain supporting documents.	Rented Parental
Outgoing board Amount of board declared is $0; or is paid in cash AND The Borrower is living in their spousal partners home, but they are not an owner of the property and the spouse is not a co-borrower on the loan.	Brokers must include loan application comments confirming: the borrowers living arrangement, the spouse / de facto partner's name as advised by the applicant, why the board outgo cannot be verified by the standard list of documents or; where the amount paid is zero. Obtain supporting documents to evidence details of the residential property the spouse / defacto owns and confirm the property address matches the borrower's current residential address	Accept customer declared outgo. You are not required to obtain supporting documents	Rented
¹ Includes construction loans where the borrower will be residing in the security collateral upon completion of construction, but the security collateral cannot be selected as the residential address at settlement within OBP. Application comments must detail that the borrower will be residing in the security collateral upon completion of construction. Note: If the applicant has declared their residential housing status as 'Mortgage / Buy' or Own Outright' on the loan application form, then Accommodation Type in OBP as Mortgage / Buy or Owned.

New wording

Outgoing board Refer to Glossary for definition of a boarder
The commitment details entered into the loan assessment system (e.g. OBP) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also refer to: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents Note: Exclusion of actual rent / board outgo or notional rent is only available under limited circumstances. Refer to Serviceability Assessment > Rules you must apply > Notional Rent Expense
Scenario	The borrower will not be residing in the security collateral after purchase or drawdown¹	The borrower will be residing in the security collateral after purchase or drawdown¹
Outgoing board Amount of board declared is > $0, and is not paid in cash	Supporting documents are required and must confirm: Amount of payment Frequency	Accept customer declared outgo. Supporting documents are not required
Outgoing board Amount of board declared is $0 or; is paid in cash AND Borrower does not live with parents AND Borrower does not live in their spousal partner's owner-occupied home	Supporting documents are required and must confirm: Amount of payment Frequency	Accept customer declared outgo. Supporting documents are not required.
Outgoing board Amount of board declared is $0 or; is paid in cash AND Borrower is living with parents; or Borrower is living in their spousal partners home, but they are not an owner of the property and the spouse is a co-borrower or income guarantor (WBC only) on the loan	Accept customer declared outgo where amount is paid in cash: Amount of payment Frequency Supporting documents are not required Brokers / assessors must: Confirm the borrowers living arrangement, and Record in application notes that the board outgo cannot be verified by the standard list of documents because: the amount paid is zero; or the board is paid in cash	Accept customer declared outgo. Supporting documents are not required.
Outgoing board Amount of board declared is $0; or is paid in cash AND Borrower is living in their spousal partners home, but they are not an owner of the property and the spouse is not a co-borrower or income guarantor (WBC only) on the loan.	Accept customer declared outgo where amount is paid in cash: Amount of payment Frequency Supporting documents are required and must confirm: Details of the residential property the spouse / de facto owns, and Matches the borrower's current residential address Brokers must confirm and record in loan application notes: The borrowers living arrangement, The spouse / de facto partner's name as advised by the applicant, The reason the board outgo cannot be verified by the standard list of documents is because the amount paid is zero, or the board is paid in cash.	Accept customer declared outgo. Supporting documents are not required
¹ Includes construction loans where the borrower will be residing in the security collateral upon completion of construction, but the security collateral cannot be selected as the residential address at settlement within OBP. Application comments must detail that the borrower will be residing in the security collateral upon completion of construction

Change 5
Section 2.4 Confirm the details of the commitment > Commitment type > Outgoing Rent
Old wording

Outgoing Rent
Definition of Renter	Someone who rents a property from a landlord and has exclusive right to the rental unit during a lease term. There is usually a written tenancy agreement signed by both the landlord and the tenant.
The commitment details entered into the loan assessment system (e.g. OBP) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Evidence satisfactory repayment history > Liabilities and Commitments exempt from financial hardship checks or conduct checks Acceptable documents Note: Exclusion of actual board outgo or notional rent is only available under limited circumstances. Refer to Serviceability Assessment > Rules you must apply > Notional Rent
Scenario	The borrower will not be residing in the security property after purchase or drawdown¹	The borrower will be residing in the security property after purchase or drawdown¹	Allowable Accommodation Type in OBP
Outgoing rent	Obtain supporting documents and confirm: Amount of payment Frequency	Accept customer declared outgo. You are not required to obtain supporting documents.	Rented
¹ Includes construction loans where the borrower will be residing in the security upon completion of construction, but the security cannot be selected as the residential address at settlement within OBP. Application comments must detail that the borrower will be residing in the security upon completion of construction. Note: If the applicant has declared their residential housing status as 'Mortgage / Buy' or Own Outright' on the loan application form, then enter Accommodation Type in OBP as Mortgage / Buy or Owned

New wording

Outgoing Rent Refer to Glossary for definition of a renter
The commitment details entered into the loan assessment system (e.g. OBP) must match the information to be verified on the supporting documents except where detailed in Allowable Variances Also see: Liabilities and Commitments exempt from financial hardship arrangement or conduct checks Acceptable documents Note: Exclusion of actual board outgo or notional rent is only available under limited circumstances. Refer to Serviceability Assessment > Rules you must apply > Notional Rent Expense
Scenario	The borrower will not be residing in the security property after purchase or drawdown¹	The borrower will be residing in the security property after purchase or drawdown¹
Outgoing rent	Supporting documents are required and must confirm: Amount of payment Frequency	Accept customer declared outgo. Supporting documents are not required.
¹ Includes construction loans where the borrower will be residing in the security upon completion of construction, but the security cannot be selected as the residential address at settlement within OBP. Application comments must detail that the borrower will be residing in the security upon completion of construction.

Change 6
Impacted section 2.5.1 Liabilities and Commitments except from financial hardship arrangement checks or conduct checks
New commitment type added > Centrelink debt

Change 7
Impacted section 2.6 Acceptable Documents, New commitment type and Acceptable documents added to section B

Centrelink debt

The below can be used to confirm details of the commitment:

Government letter

Change 8
Impacted section 2.6 Acceptable Documents
Change to information for commitment type > Outgoing board
Old wording

Outgoing board	Amount of board declared is > $0 and is not paid in cash Any one of the below documents can be used to confirm details of the commitment: Account Statement - covering 2 payment cycles with narratives aligned to the commitment Account Transaction listing - covering 2 payment cycles with narratives aligned to the commitment Lender Assist enquiry - 2 payment cycles with narratives aligned to the commitment. If verified using Lender Assist tool, a pdf screenshot must be held on file
	Outgoing board declared is $0 or; is paid in cash AND Borrower does not live with parents and Borrower does not live in their spousal partner's home The below can be used to confirm details of the commitment: Statutory declaration witnessed by appropriate person For more information about Statutory declarations, refer to Commitments > Rules > Statutory declarations.
	Amount of board declared is $0 or; is paid in cash AND Borrower is living in their spousal partners home but they are not an owner of the property and the spouse is an additional borrower on the loan; Or Borrower is living with parents No documentation is required to confirm details of the commitment
	Amount of board declared is $0 or; is paid in cash AND the Borrower is living in their spousal partners home but they are not an owner of the property and the spouse is not a co-borrower on the loan Any of the below can be used to confirm details of the commitment: Council rates notice - showing a property owner matching the spousal partner's name; or Utility bill - showing a property owner matching the spousal partner's name

New wording

Outgoing board	Amount of board declared is > $0 and is not paid in cash Any one of the below documents can be used to confirm details of the commitment: Account Statement or Account Transaction listing - covering 2 payment cycles with narratives aligned to the commitment Lender Assist enquiry - 2 payment cycles with narratives aligned to the commitment. If verified using Lender Assist tool, a pdf screenshot must be held on file
	Amount of board declared is $0 or; is paid in cash AND Borrower does not live with parents or in their spousal partner's home A Statutory declaration witnessed by appropriate person can be used to confirm details of the commitment. For more information about Statutory declarations, refer to Commitments > Rules > Statutory declarations
	Amount of board declared is $0 or; is paid in cash AND Borrower is living in their spousal partners owner occupied home, but they are not an owner of the property, and their spouse is a co-borrower or income guarantor (WBC only) on the loan No documentation is required to confirm details of the commitment
	Amount of board declared is $0 or; is paid in cash AND Borrower is living in their spousal partners owner occupied home, but they are not an owner of the property, and their spouse is not a co-borrower or income guarantor (WBC only) on the loan Any of the below can be used to confirm details of the commitment where the property owner shown matches the spousal partner’s name: Council rates notice; or Utility bill

Change 9
Impacted section 2.7 Allowable variances
New commitment types added to Allowable variance table:

Centrelink debt
Tax Debt Type A

Change 10
Updated table in section ‘2.6 Acceptable documents’ to add links to new sub-section in Document Standards policy > Using a combination of documents to complete verification

24 April 2023

Change references throughout policy

from Serviceability policy > Apportioned shared commitment rule
to Serviceability policy > Apportioned shared commitment rule or the Apportioned household expenses and shared commitments – Spousal same household rule

21 May 2023

Change 1

Throughout document, redirected references and links from ‘Validation of information provided by the customer’ policy chapter to ‘Loan Application and Approval > Validation of information provided by the customer’. Housekeeping change only

Change 2
Under section ‘Confirm details of the commitment’ > Buy Now Pay Later from 62 day providers : Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay’:

Deleted:
- ‘The commitment details entered into the loan assessment system (e.g. OBP) must match the information to be verified on the supporting documents except where detailed in Allowable Variances’. No change to policy, housekeeping change only as a verification document is not required to confirm this commitment details
- Link to ‘Acceptable documents’. No change to policy, housekeeping change only as a verification document is not required to confirm this commitment details

Change 3
Under section ‘Confirm details of the commitment’ > Mortgages > Non-Refinance’
Changed from ‘Interest Rate (external loans)’ changed to: ‘Interest Rate ’. No change to policy, housekeeping change only

Change 4
Under section ‘Acceptable documents’ - No change to policy, housekeeping change only to simplify policy:
Changed from:
All of the below are to be met for supporting documents:

Comply with specific rules set out in this policy;
Comply with Document Standards policy;
Can be used on a singularly or in combination with other documentation (including but not limited to Digital documentation and digital media), refer Document Standards policy > Using a combination of documents to complete verification; and
Must be held in the loan file (Note: the CCR does not need to be printed or imaged).

Changed to:
All of the below are to be met for supporting documents:

Comply with specific rules set out in this policy, and
Comply with Document Standards policy, and
Can be used on a singularly or in combination with other documentation refer Document Standards policy > Using a combination of documents to complete verification, and
Be uploaded into ApplyOnline for verification to be undertaken and also held and retained in loan file (the CCR does not need to be printed or imaged).

Change 5
Under section ‘Acceptable documents’ - No change to policy, housekeeping change (resulting from some ‘Buy Now Pay Later – Revolving Term’ facilities being included on CCR):

Updated ‘Commitment Type B’ by renaming ‘Buy Now Pay Later’ to ‘Buy Now Pay Later – Fixed Term’
Updated ‘Commitment Type A’:
- Added ‘Buy Now Pay Later – Revolving Term’
- Added the below to ‘Commitment Type section A’ :

‘Buy Now Pay Later’ provider document from digital application or internet site

Can be used to confirm details of the commitment
Can be used to evidence satisfactory repayment history where it displays transaction history / payment schedule’

Change 6
Under section ‘Acceptable documents’ > Lease Novated (salary packaged/salary sacrificed)’ deleted underlined text below- No change to policy, housekeeping change:
Change from

Any of the below documents can be used to confirm details of the commitment and repayment history:
- Lease provider's document
- Lease provider's email advice
- Salary packaging provider's document
- Salary packaging provider's email advice

Note: If the document does not show that the lease is 'novated', a salary packaging / sacrifice arrangement must be evidenced on a payslip.

Change 7
Under section ‘Confirm details of the commitment’ > Tax Bill:

deleted the text below- (No change to policy, housekeeping change as Tax Bills are not required to be loaded as a commitment):

‘The commitment details entered into the loan assessment system (e.g. OBP, Self-Employed Income calculator) must match the information to be verified on the supporting documents except where detailed in Allowable Variances
Also see:

Liabilities and Commitments exempt from financial hardship arrangement or conduct checks
Acceptable documents’

Change 8
Under section ‘Acceptable documents’:

Renamed Commitment Type ‘Tax’ to ‘Tax Debt’

21 May 2023

Links corrected

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03.06 Construction Loans

Policy ID

03.06

Policy Name

Construction Loans

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Responsibility to inform borrowers
2.2 Unacceptable Building Types
2.3 Acceptable Building Types - Definition
2.4 Acceptable Building Types - Requirements
2.5 Additional building work outside of the primary builder's fixed price contract
2.6 Documentation Required From Borrower
2.7 Borrower's contribution
2.8 Changes to council approved or privately certified plans
2.9 Progress Inspections
2.10 Progress Payments
2.11 Progress Payments not required
2.12 Quantity Surveyor (QS) Report
2.13 Settlement period- building loans
3. Process to follow
3.1 First Home Owners Grant (FHOG)
3.2 Licensed Builder Fixed Price ≤ $1m
3.3 Construction loans using 'as if complete' valuations where there is additional building work outside the builder's fixed price contract
3.4 Licensed Builder Fixed Price > $1m
3.5 Licensed Builder Cost-Plus
3.6 Owner Builder
3.7 Renovations / Home Improvement loans using 'Construction' valuation
3.8 Kit Homes
3.9 Multiple Dwellings
3.10 Transportable Homes
3.11 House / land package
3.12 Progress Payments
3.12.1 Customer and Rental Support Agreement (CARS)
3.12.2 Multiple Stage Payments
3.12.3 Frequent builder payment

1. About this policy

1.1 Why this policy?

Purpose	A construction loan, also known as a building loan or a TBE (To-Be-Erected) loan, is a specialised lending option that provides a borrower and their builder, funding throughout the process of constructing or renovating a property. This policy identifies the structure required for a home loan where the borrowers would like to use the funds for residential building purposes. The loan proceeds can be used to fund the construction of one or more residential dwellings (subject to Acceptable Security Collateral ) or undertake home improvements (renovations) to an already established property, where the property is also security for the proposed loan. The main feature is the loan proceeds are paid in progressive payments to the builder during the construction phase. The frequency and percentage / amount of the progress payment being advanced can be affected by the type of security property and nature of the building contract. The construction can be completed by way of a Licensed Builder or an Owner Builder.
Applicable to	Consumer mortgage applications where a borrower is seeking a new loan
Policy exclusions	This policy does not apply to : Bridging ICAP loan with no end debt Loan increase "Turn Key" House and Land Packages or Multi Unit Residential Developments
Reading this policy	Unless specifically stipulated otherwise, the content applies to both non-mortgage insured (non-MI) and mortgage insured (MI) consumer mortgage loan applications
Associated policies	You may also need to refer to other lending policy rules, including but not limited to: Loan to Value Ratio (LVR) Acceptable Security Collateral If the application requires mortgage insurance, refer to: Lenders Mortgage Insurance

2. Rules you must apply

2.1 Responsibility to inform borrowers

For both Licensed Builder (Fixed Price or Cost-plus contracts) and Owner Builder applications, Lenders must ensure borrowers are aware that :	Their own funds must be used in full prior to the release of any loan funds. Refer : Borrower's Contribution 03.25 Genuine Savings, Equity and Customer Contribution > 2.3.1 Evidencing customer contribution
	Borrowers have the sole responsibility to ensure the construction complies with Local Council approval conditions and that the construction of their dwelling meets their satisfaction before submitting each request for progress payment.
	The Bank and / or its valuer, has no responsibility for the quality of work undertaken by the borrower's builder / contractors
	They are encouraged to engage an independent party (at their expense) who is suitably qualified, to monitor progress of construction.
	A Quantity Surveyor (QS) report may be required. Refer to Quantity Surveyor (QS) reports for further details.
	The first drawing is to be within 12 months of the offer date in the Terms and Conditions letter.
	The loan is to be fully drawn within 24 months of the offer date in the Terms and Conditions letter.
	The 24-month construction term, or any longer period as agreed by us in writing, is separate to the loan term that commences post construction (Refer Maximum Loan Term and Exit (Repayment) Strategy)
For Licenced Builder Fixed Price Contract and Cost-Plus Contract only	all progress payments will be paid to the builder direct and not to the borrower/s if a building contract is varied after loan drawdown/s have commenced and: upgrades are made, then the customers must ensure that they have access to sufficient funds to pay for any increase in the cost of construction. For example the borrower wants to substitute a more expensive type of tap wear. down-grades are made, then the customers must notify the Bank as the variations to the contract may impact the valuation of the property. For example original building contract included ducted air-conditioning and the customers ask the builder to not proceed with purchase and installation of the air-conditioning
For Owner Builders only	funding in advance is not available. Funds are released against the cost to complete as advised by the Bank’s panel valuer. Release of funds is based on the items being affixed to the site. E.g. The borrower wishes to purchase the bricks ready to construct the walls. Payment can only be made after the bricks are affixed in place. For any variation to cost estimates after the Loan’s first advance, borrower/s should ensure they have sufficient funds to cover the difference from the original contract (where there is an increase in costs to construct) The panel valuer may request additional documentation to support the 'Construction' valuation and this will be set out in the valuation report. This may include: a Quantity Surveyor (QS) reports Engineer's details re slab / footings Pest treatment or pest prevention confirmation Roof truss details from manufacturer for properties located in NSW: Before the final progress payment the Bank requires a copy of the updated Survey Report showing the position of the improvements in relation to the boundaries, and that all improvements comply with the Local Government Ordinances (The survey should be updated after completion of eaves and guttering) or a copy of the Certificate of Occupancy. Prior to the first progress payment the Bank may request to sight the survey report showing the location of the footings / slab (or the pegged out survey) In all cases the Broker is to ascertain the borrower/s experience and background to undertake the construction and provide notes in their submission accordingly. Lender/Broker is to comment on any large variations between Owner Builder cost estimate and Panel Valuer check costs shown on the valuation report. Check costs are the Valuer's estimates of the cost of the project under contract builder conditions. There should be a demonstrable cost benefit for the Owner builder project v's completing the transaction via a Licensed builder.
For Kit Home applications	the Bank will not advance any funds for purchase or delivery of the kit against value of the (unassembled) kit or, offsite construction costs.

2.2 Unacceptable Building Types

Split Contract constructions (both single residential and multi-unit residential developments) are not permitted.

Kit homes where funding of the kit is required up front or prior to instillation

Transportable homes where funding of the dwelling is required prior to the dwelling being transported, fixed on site, and all services connected.

Owner builder loans where funding are in advance (refer Owner Builder )

Any home proposed to be built from unconventional building materials. Example Mud Brick, straw bale, polystyrene, log cabin.

Refer to Loan to Value Ratio (LVR) and the Acceptable Security Collateral policies for further information.

2.3 Acceptable Building Types - Definition

Acceptable Building Types	Definition
Licensed Builder - Fixed Price Contract	A fixed price contract is where the customer and the Licensed Builder agree to a set price for the cost of building a home or undertaking renovations prior to commencing any building work. If the contract is not a fixed price building contract, refer to Cost-Plus Contracts If a borrower is constructing with a house / land package refer to House / land Packages Deals for further information.
Licensed Builder Cost - Plus (Non-fixed price) contract	Cost plus contracts can be identified because they do not state the total cost of the build and may only provide a 'budgeted cost to complete', 'Cost plus a percentage' or may show the cost of the works plus allow a margin for labour or even building material cost increases. The amount due to the builder is the actual cost incurred by the contractor plus a percentage or the cost incurred plus an hourly rate for the contractor. As materials are not a fixed price, the overall cost of the contract can vary. This can result in a significant increase in the contract price prior to/or during construction and therefore may adversely affect the Bank's lending and security position.
Owner Builder	The Bank will treat the following application and borrower types as Owner Builders: Anyone who takes on the responsibility of managing their own residential building project. This includes where the borrower(s) takes on the tasks of coordinating and contracting roles usually undertaken by an architect or builder, regardless if they do or do not hold qualifications in the building industry or related trades (e.g. electrician, plumber). Any portion of the construction is carried out by the owner The borrower(s) are Directors / Proprietors of the entity undertaking the construction Exception : If the entity is a Pty Ltd company (PLC) and, there is a standard fixed price building contract between PLC as the builder and the borrower as the customer, refer to Licensed builder fixed price contract or Licensed builder Cost-plus contract ) Kit Homes (even where the construction is completed by an unrelated licensed builder contract)
Renovation / Home Improvement loans	A renovation to an established residential property can be completed by way of a Licensed Builder, Owner Builder or using multiple external tradespeople and will be assessed according to builder type and value of construction. In some cases we may be able to release equity against the current value of an existing property, refer to ' Progress payments not required' for eligibility criteria. Where the 'TBE' (To Be Erected) value is to be relied upon for security value and the Bank requires progress payments, then: the Bank must control the release of funds to ensure the renovations / Home Improvements work is completed, and all quotations from all subcontractors (including proposed finishes and specifications) must be provided to the Bank prior to ordering the full valuation report (Construction long form or Construction short form valuation).
Kit Homes	A construction option wherein most of the components of the home are prefabricated and are brought to the site / location of construction where it is assembled. A Kit Home can be either: Wholly or partially constructed offsite (i.e. in manufacturer's premises to a specific stage) then delivered to borrower's land for affixing to the borrower's land; or All building materials necessary to construct the home are delivered to the borrower’s land for constructing on site.
Multiple Dwellings	Residential building loans where more than one dwelling is being constructed i.e. duplex, townhouses or units are considered to be multiple dwelling developments.
Transportable Homes	Transportable homes are defined as: A dwelling transported to site and permanently affixed in place. Require connection to services (e.g. water, gas, electricity, sewerage). Is not able to be easily moved again. Is not to be confused with a relocatable home, which is not acceptable for bank lending purposes.
House / land package	Standard house and land package Borrowers choose a block of land and house from a range of building plan options offered by the builder. Borrowers may have a choice of builders if the land is being purchased from a developer. The builder may be completing additional items like air-conditioning, carpeting, landscaping etc. When determining the market value on a 'To be Erected (TBE)' basis, the valuation will reflect separate values for the land and improvements. "Turn Key" House and Land Packages or Multi Unit Residential Developments With a "Turn Key" style house and land package the property is purchased as one parcel and contracts can be entered into for the purchase either on completion of the home before construction commences or once construction is complete. The borrower is not able to choose their own builder and settlement does not take place until after completion of construction.

2.4 Acceptable Building Types – Requirements

The following table lists the prerequisites for each acceptable building type.

Requirements	Licenced Builder - Fixed price Contract. Also see 2.5 Additional building work outside of the primary builder’s fixed price contract	Licenced Builder Cost-Plus (Non-fixed price) contract	Owner Builder	Renovation/Home Improvement loans	Kit Homes	Multiple Dwellings	Transportable Homes
View the building contract to ensure there are no cash backs or incentives within the contract. The value of any cash back or incentive is to be subtracted from the estimated value of the property	√	√				√
Approval is subject to compliance with Security Collateral Value Assessment policy)	√	√	√	√	√	√	√
Evidence of the borrower's funds to complete is held prior to formal approval (refer to Borrower's contribution)	√	√	√	√	√	√	√
For maximum LVR's refer to Loan to Value Ratio (LVR)	√	√	√	√	√	√	√
Applications are not eligible for Mortgage Insurance where the borrower(s) are Directors / Proprietors of the entity undertaking the construction, including where the building entity is a Pty Ltd company.	√
Progress inspections will be required at each progress payment request, the cost of these progress inspections are not covered by the Bank.		√	√		√
A completed Independent Adviser's Inspection Report, which includes written evidence from a recognised local building advisory service / architect / quantity surveyor / independent licensed building inspector that all the following aspects have been verified and are satisfactory: The cost benefit of the borrower completing the project on an owner-builder basis The total cost to complete project (from beginning to end) Where a Quantity Surveyor report is held the provision of the Independent Adviser's Inspection Report, is not required.			√
Are assessed in line with Owner Builder policy			√		√
When construction is completed by way of a Licensed Builder contract, a schedule of payments is required	√	√			√	√
The Bank will not advance any funds for purchase or delivery of the kit against value of the (unassembled) kit or, offsite construction costs					√
Mortgage insurance is not available					√		√
Multiple dwelling applications: Are only acceptable where the construction is being completed by a Licensed Builder - fixed price contract or Cost - plus contract. Owner builder applications are not acceptable More than 2 dwellings on a single title is an exception to policy and outside of a lenders/assessor authority to approve. Credit may consider to a maximum of 4 dwellings on 1 title as an exception, generally with lower LVR's All other requirements will continue to apply as for single dwelling construction For further information refer to Licensed Builder - fixed price contract or Licensed builder Cost - plus contract . These types of Loan Applications attract higher valuation costs, as such applications are to be referred to Credit for In Principal Approval (IPA) prior to a 'Construction' valuation being ordered. Refer to Loan to Value Ratio (LVR) and Acceptable Security Collateral policies for details of Multiple dwellings.						√
Funds can be advanced against: the value of the land where the borrower has sufficient equity available, or the value of the land plus the transportable home only after a progress inspection to confirm the dwelling is fixed on site and services connected (i.e. power and water). No funds will be made available against the value of the transportable home when the dwelling is off site e.g. under construction in a factory.							√
Further requirements :
*Documentation required from borrower*	Licensed Contract builder	Cost plus contracts	Owner builder	Renovation/Home Improvement loans	Kit Homes	Multiple Dwellings	Transportable Homes
Quantity Surveyor (QS) Reports	√	√	√	√	√	√	√
Progress Inspections	√	√	√	when a Construction Valuation is used	√	√	√
Progress payments	√	√	√	√	√	√	√
Acceptable Security Collateral	√	√	√		√	√	√
Glossary for a definition of ‘Construction’ valuation				√
Licensed builder fixed price contract				√		√
Licensed builder Cost - plus contract				√		√
Owner builder				√	√
Construction loans using 'Construction ' valuations where there is additional building work outside the builders fixed price contract				Refer to Process > Construction loans using 'Construction' valuation where there is additional building work outside of builder's fixed price contract

2.5 Additional building work outside of the primary builder's fixed price contract

A Licensed Builder's fixed price contract may incorporate the completion of all required building work. However, it is acceptable for the applicant to provide separate contracts or quotes for additional work to be completed as a part of the loan application.

If these works are being funded by the Bank and the valuer has considered these improvements when arriving at a 'TBE' (To Be Erected) valuation figure of the property, the Bank must control funds to ensure this work is completed.

The following items are examples of additional works which may be completed by an external contractor other than the primary builder:

Air conditioning
Carpets
Curtains
Driveways
Fences
Flooring
Landscaping
Paving
Pergolas
Security System
Swimming Pool
Window furnishing

For further requirements refer to:

Process > Renovation / Home Improvement loans using 'Construction' valuation
Process > Construction loans using 'Construction' valuation where there is additional building work outside of builder's fixed price contract

2.6 Documentation Required From Borrower

The following table lists the documents required prior to ordering a valuation, prior to formal approval and post formal approval.

Licenced Builder - Fixed price contracts (Including - Renovations where progress payments are required, Multiple Dwellings and Transportable Homes)

Document type	Required to order a valuation (must be given to the valuer)	Prior to formal approval	Required prior to progress payments commencing	Required prior to final progress payment being made
Signed tender dated < 12mths; or Fully Executed Contract < 12mths Tender or contract must: include address of the (security) property on which construction is to occur be for the cost of building in accordance with plans and specifications include the builder's business name and Builders licence number be a firm tender that is current and valid as of the date of application and will not expire prior to settlement / loan drawdown. Loan will not be drawn based solely on a tender. I.e. full building contract is required.	√
Copy of plans, specifications and Schedule of payments	√
External Tradespeople Quotes Where additional building work outside of the primary builder's fixed price contract AND the valuer is being asked to consider these improvements when completing a 'Construction' valuation.	√
Land contract of sale including all annexures and special conditions (if applicable)	√
Title Search	√
Builder's Risk Insurance (including Public Liability). The insurance should cover the minimum replacement cost. It must remain current during construction.			√³
Evidence of funds to complete (borrower contribution)		√
Council approved plans and specifications If changes have been made to the council approved plans that the Bank used to formally approve the loan, refer to Changes to council approved plans			√³
Copy of the fully executed contract (if tender previously provided) including any variations			√
Receipt of satisfactory valuation report		√
The Progress Payments Team must have issued a Builders pack. This occurs once title has been certified & settlement requirements met & there is no evidence of shortfall.			√
Application for Progress Payment applicable for the stage of construction that has been completed (These forms are issued with the Builders Pack and must not be pre-signed)			√
If requested by the original valuer (NSW only), a copy of the Survey Report identifying the land and showing where the foundations/slab are located in relation to the boundaries is to be provided			√
NSW properties: Certificate of Occupancy or Updated Survey Report evidencing that all improvements comply with the Local Government Ordinances (The survey should be updated after completion of eaves and guttering). ACT, Victoria, NT only - Certificate of Occupancy & Compliance QLD properties - Certificate of Completion/Occupancy				√
Certificate of House Insurance				√

Owner Builder, Kit Homes and Licenced Builder Cost-Plus contracts

Documents Required	Required to order a valuation (must be given to the valuer)	Prior to formal approval	Required prior to progress payments commencing	Required prior to final progress payments
Council Approved Plans and Specifications or Privately Certified Plans If changes have been made to the council approved plans that the Bank used to formally approve the loan, refer to Changes to council approved plans	√
Independent Adviser's Inspection Report Not required if a Quantity Surveyor report is held	√
Signed tenderdated < 12mths; or Fully Executed Contract<12mths For Kit home and licenced builder cost plus contract Tender or contract must: include address of the (security) property on which construction is to occur be for the cost of building in accordance with approved plans and specifications include the builder's business name and Builders licence number Be a firm tender that is current and valid as of the date of application and will not expire prior to settlement / loan drawdown.	√
Copy of plans, specifications and Schedule of payments For Kit home and licenced builder cost plus contract	√
Copy of quotations from all subcontractors (including proposed finishes and specifications)	√
Land contract of sale including all annexures and special conditions (if applicable)	√
Builder's Risk Insurance / Construction Insurance (Including Public Liability). The insurance should cover the minimum replacement cost. It must remain current during construction.			√⁴
Title search	√
The panel valuer may request additional documentation to support the 'Construction' valuation and this will be set out in the valuation report. This may include: Engineer's details regarding slab/footings Engineer's Certificate re slab/footings Pest treatment or pest prevention confirmation Roof truss details from manufacturer	√
Evidence of funds to complete (borrower contribution)		√
Receipt of satisfactory valuation report		√
Receipt / sighting of Council approved plans & specification must be confirmed by the Bank's (original) valuer			√
A Survey Report (showing the location of the completed footings/slab identifying the land and showing where the foundations/slab are located in relation to the boundaries)			√
Current Owner Builder's licence/permit (not required when Cost-Plus construction completed by licensed builder)			√
NSW properties: Certificate of Occupancy or Updated Survey Report evidencing that all improvements comply with the Local Government Ordinances (The survey should be updated after completion of eaves and guttering). ACT, Victoria, NT only - Certificate of Occupancy & Compliance Qld properties - Certificate of Completion/Occupancy				√

2.7 Borrower's contribution

The borrower's contribution must always be fully utilised towards the construction before any progress payments commence
Owner Builder	Transportable	All Other
Funding in advance is not available. The Bank will not advance funds for work yet to be completed but will only reimburse Owner Builders for work completed. This means borrowers need to hold sufficient funds to allow them to cover the most expensive stage of construction. The cost of the most expensive stage may be greater than the difference between the Owner Builder cash flow statement and loan amount. Evidence of Borrower contribution held in a savings account is required prior to the Bank issuing a Builders Pack.	In determining the borrowers contribution, consider the difference between the loan amount and costs related to the purchase of the `house'. For a transportable this may also include the costs of transportation, transit insurance and site fixing.	Where the loan amount applied for / approved, is less than or equal to the costs/tender (including quotes), borrowers will be required to have the difference between the tender / contract and loan amount available in a savings account, prior to or concurrent with the Bank authorising commencement of construction.
Insufficient building funds (shortfall) to complete security collateral When a shortfall is identified by the Progress Payments Team, the Lender/Broker will be advised and are required to address before loan funds can be drawn. The calculation used to identify a shortfall is as follows: Borrower’s Contribution + Loan Amount (less any fees) is less than the Building Price. The Building price includes the contract plus any additional quotes used to achieve the ‘To Be Erected (TBE)’ valuation figure. Following this assessment of the borrower/s’ position, the Broker must notify the Progress Payments team of the outcome, so that an amended schedule can be issued.

2.8 Changes to council approved or privately certified plans

Before the borrower makes any changes to council approved plans, they must inform the Bank and obtain consent. If there are changes, such as to the structure or the projected costing, details must be provided in writing.

A Construction Valuation (short form or long form) is required to confirm the property's value against the new (amended) Council Approved Plans and Specifications.

Subject to the nature of the change the application may need to be re-assessed and a new approval issued (including new loan offer documents and progress payment schedules). The re-assessment is required to ensure the transaction, security and resulting LVR remain acceptable to the Bank.

2.9 Progress Inspections

Build Type	Progress Inspection Required
Licensed Builder fixed price contract is less than or equal to $250k	If LVR is less than 80% at practical completion is required
	If LVR is equal to or greater than 80% 1^st at frame stage 2^nd at practical completion
Licensed Builder fixed price contract is greater than $250k but less than or equal to $1m	1^stat frame stage 2^ndat practical completion
Owner Builder or Licensed Builder fixed price contract is greater than $1m; or Cost-Plus contract; or Kit Homes	Every time a progress payment is requested
Transportable	To confirm dwelling is fixed on site with services connected, additional inspections based on LVR or build/contract type.

2.10 Progress Payments

Definition

Refer 03.28 Glossary

Conditions

All required documentation is to be received by the Bank at the appropriate stages for the loan and progress payments to be drawn.
Any shortfall of funds (Insufficient building funds (shortfall) to complete security collateral) will require Lender/Broker follow up. The Lender/Broker will need to evidence the borrower has sufficient funds to complete and send a confirmation email to the Progress Payments Team.
The Progress Payments Team must have issued a Builders Pack. This occurs once the certificate of title has been certified, settlement requirements have been met and there is no evidence of shortfall.
A Progress Inspection Report may be requested from the original valuer. Refer to Progress Inspections
Process : Refer to Process > Progress Payments .

Owner Builder

Owner Builder progress payment stages are not pre-determined.
When the borrower requests a progress payment, an inspection by the Bank's panel valuer is required to determine the value of the work completed to date, prior to any payment being released.

At all times, sufficient loan funds are retained to ensure practical completion of the dwelling based on the owner builder's original cost to complete and valuer's assessment of completed work.
Assessment is based only on works completed / materials fixed to site, and not materials purchased or delivered to site. For example the Owner Builder may have just completed the pouring of the slab and request the first progress payment. In addition they have purchased the bricks and roof tiles and had them delivered to the construction site. The Bank will only reimburse the customer for the slab because the bricks and roof tiles have not been installed and are not fixed to site.

Licensed Builder contracts – Standard Schedule of payments

Progress payment schedules are considered to be 'Standard' where the valuer makes a comment within the valuation commentary to indicate they are 'to industry standard', or makes no comment.

Licensed Builder contracts – Non-Standard Schedule of payments

If the valuer comments the schedule of payments are 'not to industry standard', then you must request a new schedule of payments from the Builder when the below conditions apply:

The schedule already held does not meet the table¹ below and:
- The application is Mortgage Insured; or
- The application is Non-mortgage insured loan with any risk rating ≥ 4

No action is required when the valuer comments 'not to industry standard' but the above conditions are not triggered.

When required to obtain a new schedule of payments, all of the below applies:

They must correspond with the completion basic stages of construction, which can be:
- Deposit
- Foundations
- Frame
- External Lining
- Lockup / Internal Lining
- Practical Completion
The schedule of payments must comply with the below table:

¹Progress Payment Stage	% of Contract
Maximum at Foundation Stage (including deposit)	20
Minimum at Practical Completion Stage	10
Other individual stages limited to	≤ 35
All Stages must total	100

The above table ensures that a builder allocates the appropriate level of funds at each stage of the build, ensuring the construction is completed.

The application must not proceed to formal approval until a compliant schedule of payments is held.

2.11 Progress Payments not required

Eligibility criteria

If the loan LVR is based on the 'as is' market value in either, an acceptable existing valuation or a new valuation, the loan may be eligible to be drawn as a single drawdown without progress payments. Refer to:
- the ‘Progress Payments not required’ table below for maximum loan amounts and any additional requirements.
- Loan to Value Ratio (LVR) policy for Maximum LVR
- Glossary for definition of ‘as is’ valuation
Brokers and Assessors are required to identify and record the purpose of all loan funds, refer Eligibility > Suitability Assessment under Responsible Lending
The residential property improvement amount is to be reflected in ApplyOnline.

Progress Payments not required
Scenario	Non-mortgage insured	Mortgage Insured
Renovations to an already established property* Non-owner builder	May be drawn as single drawdown where the loan amount or increase is less than $250,000 Additional requirements Can meet either definition of ‘Renovations’ or ‘Additions’ as per Glossary .	May be drawn as single drawdown where the loan amount or increase is less than $100,000 Additional requirements Must meet definition of ‘Renovation' as per Glossary
Additions to an already established property* Non-owner builder		Not acceptable to process as a single draw down. Progress payments are required.
Owner Builder	May be drawn as single drawdown where the loan amount or increase less than or equal to $25,000 Additional requirements Can meet either definition of ‘Renovations’ or ‘Additions’ as per Glossary	Mortgage insured not permitted
*Note: Where the below scenarios occur the loan must be completed with progress payments: the new loan or increase is required to cover cost overruns / rectification of sub-standard work, or the ‘TBE’ (To Be Erected) value is to be relied upon for security value, or Work to be completed will reduce the living space or floor plan of the property

2.12 Quantity Surveyor (QS) Report

Definition of a QS	A professional who specialises in the field of construction and property development, with the primary responsibility to accurately estimate the costs associated with construction projects, from the initial planning stages to the final completion.
When is a QS report required?	For all Acceptable Building Types, the Valuer at their discretion may request a QS report. Note: when the valuer has requested a QS report, this cannot be waived. Common instances when this may occur include (but are not limited to): Owner builder constructions Building sites with complexities (e.g., site access complication, steeply sloping environmental issues / flooding). High build cost per square metre Building contracts with non-industry standard progress schedules e.g. A progress schedule that is time based (e.g., monthly payments to the builder that do not relate to work completed) A progress schedule that requires payments to be paid, for partially completed works / stages. Constructions with unusual designs (e.g. where valuer has few peers in the building market to draw reasonable rate cost conclusions). For further information as to what is considered 'unusual' refer to Assessing Security Collateral > rules you must apply > Assessing security requirements - standard real estate > Residential dwelling to be erected.
Who pays for a QS report?	A QS is to be engaged and paid for by the borrower/s in all instances. This includes the QS report at the initial TBE Valuation and at all Progress Inspection stages.
Conditions	The QS engaged by the borrower/s must be a member of Australian Institute of Quantity Surveyors . Whenever a progress payment is requested, if the valuer requires a QS report, the customer must provide this to the bank. A QS Report must include: The cost benefit of completing the construction on an owner builder basis. The total cost to complete the project. The site stages must add up to the total cost of the project. The QS Report provided at progress inspections is to cover: Evidence that work completed is according to industry standards. Cost of work completed to date. A comparison with original costing. When the QS report has been provided, the broker / assessor must archive a copy with the loan file and provide a copy to the valuer.
Additional Conditions	If Mortgage Operations identifies that the cost to complete the project on the QS report exceeds the building contract or remaining undrawn loan balance, the application will be referred to the Broker to confirm how any additional costs will be met. Refer to insufficient building funds (shortfall) to complete security collateral .

2.13 Settlement period - building loans

'Settlement' for all building loans is defined as the first draw down (i.e. for land settlement) or where no initial draw is to occur, satisfactory completion of all the Bank's legal requirements to register a mortgage over the land and funds are ready to be made available.

For Construction Loans (Contract Builder/Owner Builder):

Initial draw down is to occur within 12 months of the Loan offer date and;
Completion of construction and/or final progress payment is to be made within twenty four (24) month of the loan offer date

3. Process to follow

3.1 First Home Owners Grant (FHOG)

Comply with state specific First Home Owner Grant (FHOG) requirements to ensure the correct supporting documentation is provided.

3.2 Licensed Builder Fixed Price less than or equal to $1m

	Using a 'Construction' Valuation	Using an "as-is" Valuation
When loading application into ApplyOnline	ABS/Loan Purpose = Construction of Real Estate Sub-category = as relevant 'Progress Draws' to be selected	DO NOT load as 'ABS/Loan Purpose’ = Construction of Real Estate DO NOT load as Progress Draws Load as appropriate Property Type, i.e. 'House (Detached)'

3.3 Construction loans using 'Construction' valuations where there is additional building work outside the builder's fixed price contract

Also see Rules > Additional building work outside of the primary builder’s fixed price contract

Where work is to be undertaken under a 'Construction' valuation over and above the fixed price building contract, and the valuer has included these additional works in arriving at a figure for the 'To Be Erected (TBE)' value of the property, then the Bank must control funds to ensure this work is completed.

Brokers are required to determine the type of additional work and note in the loan application comments accordingly. Complete loan application via ApplyOnline, selecting progress draws to apply.

External Tradespeople quotes:

When constructions less than or equal to $1m and external tradespeople/contractors are used for additional work:
- Add the value of the additional quotes to the Construction value in ApplyOnline. A maximum of 5 quotes can be accepted without referral to Credit. If greater than 5 quotes the application is to be referred to Credit to consider any additional requirements (e.g. treat as owner builder in terms of this policy).
Where additional quotes are held, a progress inspection (PI) may be required where quotes type is:
- Carpets - PI not required
- Curtains - PI not required
- Driveway/Pergola/Carport - PI required
- Air-Conditioning - PI not required
- Swimming Pool - PI required
- Fence/Sheds - PI required
- Other <=$5,000 - PI not required for non-mortgage insured loans
- Other >$5,000 - PI not required for non-mortgage insured loans
- Other <=$2,000 - PI not required for mortgage insured loans
- Other >$2,000 - PI required for mortgage insured loans

Renovations using multiple builders/contractors:

ApplyOnline requirements are the same as Fixed Price ≤ $1m
Refer to Fixed Price greater than $1m Process for progress inspection requirements
A maximum of 5 quotes can be accepted without referral to Credit. If greater than 5 quotes the application is to be referred to Credit to consider any additional requirements (e.g. treat as owner builder in terms of this policy).

3.4 Licensed Builder Fixed Price greater than $1m

Fixed Price contracts greater than $1m may require progress inspections at each progress drawdown at customer cost. The Terms and Conditions letter and "Your Guide to Progress Payments" sections provides information needed to ensure payments proceed without delay.

	Using a 'Construction' Valuation	Using an "as-is" Valuation
When loading application into ApplyOnline	ABS/Loan Purpose = Construction of Real Estate Sub-category = as relevant ‘Progress Draws’ to be selected Market Value to be used as determined by Loan to Value (LVR) > LVR Calculation Policy	Not permitted to rest on an 'as is' valuation where the value of the building contract is >$1m.

3.5 Licensed Builder Cost - Plus

Licensed Builder Cost-Plus constructions may require progress inspections at each progress drawdown at customer cost. The Terms and Conditions letter and "Your Guide to Progress Payments" section provides information needed to ensure payments proceed without delay.

	Using a 'Construction' Valuation	Using an "as-is" Valuation
When loading application into ApplyOnline	ABS/Loan Purpose = Construction of Real Estate Sub-category = as relevant ‘Progress Draws’ to be selected Market Value to be used as determined by Loan to Value (LVR) > LVR Calculation Policy	DO NOT load as ‘ABS/Loan Purpose’ = Construction of Real Estate DO NOT load as Progress Draws Load as appropriate Property Type i.e. ‘House (Detached)’

3.6 Owner Builder

Owner Builder constructions may require progress inspections at each progress drawdown at customer cost. The Terms and Conditions letter and "Your Guide to Progress Payments" sections provides information needed to ensure payments proceed without delay.

	Using a 'Construction' Valuation	Using an "as-is" Valuation
When loading application into ApplyOnline	ABS/Loan Purpose = Construction of Real Estate Sub-category = as relevant ‘Progress Draws’ to be selected Market Value to be used as determined by Loan to Value (LVR) > LVR Calculation Policy	DO NOT load as ‘ABS/Loan Purpose’ = Construction of Real Estate DO NOT load as Progress Draws Load as appropriate Property Type i.e. ‘House (Detached)’

3.7 Renovation / Home Improvement loans using 'Construction' valuation

Also see Rules > Renovations / Home improvement loans

Brokers are requested to ascertain the type of work to be completed, i.e. internal renovation, new kitchen, bathroom, pool, extension etc. and note in loan application comments accordingly.

Process as per policy for licensed builder either less than or equal to $1m or greater than $1m contract price noting progress draws to apply.

3.8 Kit Homes

Often Kit Homes may have two contracts which are to be supplied:

Contract to purchase Kit Home
Contract with Licensed builder to construct (in this case a schedule of payments is required)

Regardless of licensed builder to contract, owner builder Maximum LVR applies.

Kit Home constructions may require progress inspections at each progress drawdown at customer cost. The Terms and Conditions letter and "Your Guide to Progress Payments" sections provides information needed to ensure payments proceed without delay.

	Using a 'Construction' Valuation	Using an "as-is" Valuation
When loading application into ApplyOnline	ABS/Loan Purpose = Construction of Real Estate Sub-category = as relevant ‘Progress Draws’ to be selected Market Value to be used as determined by Loan to Value (LVR) > LVR Calculation Policy	DO NOT load as ‘ABS/Loan Purpose’ = Construction of Real Estate DO NOT load as Progress Draws Load as appropriate Property Type i.e. ‘House (Detached)’

3.9 Multiple Dwellings

Process as per policy for licensed builder either less than or equal to $1m or greater than $1m contract price.

3.10 Transportable Homes

Process as per policy for licensed builder either less than or equal to $1m or greater than $1m contract price.

For Transportable Homes progress payments are only available after the dwelling has been transported to site and services connected, (a progress inspection to confirm dwelling is on site is required prior to release of progress draw).

3.11 House / land package

Process as per policy for licensed builder either less than or equal to $1m or greater than $1m contract price.

3.12 Progress Payments

As each stage of construction is completed:

1. Borrowers may complete and sign a Verbal Payment Authority form if they wish to request progress payments via telephone.
If borrowers do not wish to request progress payments over the phone, each borrower must complete and sign the Request for Progress Payments for each progress payment. This form states that they are satisfied with the work completed

2. Request for progress payment forwarded to Progress Payment Team for processing

3. Each drawing is to be a minimum of $5,000.00

4. Where the construction is greater than $1m a Quantity Surveyors report may be required at each progress payment and is to cover:

Describe the standard of work completed to date and confirm compliance with the relevant building construction guidelines and
Certify the cost of work completed to date and provide a comparison with original costing and
Provide an estimate of the amount required to complete the project.

Mortgage Operations will:

Validate that the Quantity Surveyor cost to complete is acceptable. The Quantity Surveyor Report will be acceptable if the cost to complete does not exceed funds remaining after the claim is paid.
If the Quantity Surveyor report is acceptable, attach the Quantity Surveyor Report to the valuation order and proceed with ordering the progress inspection.
If the Quantity Surveyor report is not acceptable, refer to request to Credit for direction.

5. Where the loan is 'Owner Builder' prior to the release of any progress payment, an inspection by the Bank's panel valuer is required

Note: Redraw is not available during the progressive draw period of the loan.

3.12.1 Customer and Rental Support Agreement (CARS)

When dealing with Customer and Rental Support Agreement (CARS), these types of agreements are acceptable provided the following is held and verified by Mortgage Operations Progress Draws prior to payment:

CARS agreement signed by the customer and agent.
If the authorised agent in Australia is a company, a Power of Attorney from the company authorising a specific individual from the company to sign the building contract.
The individual from the company must provide a statutory Declaration confirming name, employee of the agent and signature.

Note, only the building contract signed under a CARS agreement is acceptable. Progress draw claims signed under a CARS agreement are not acceptable and must be signed by the customer.

3.12.2 Multiple Stage Payments

Where multiple stage payments (more than one stage payment at a time) are received, the Mortgage Operations Progress Payment Team will contact the borrower, and confirm that work has been completed.

3.12.3 Frequent builder payment

Where the builder requires frequent payment, e.g. monthly, and it is a licensed builder fixed price contract less than or equal to $1m then progress inspections may be required at each progress drawdown at customer cost. The Terms and Conditions letter and "Your Guide to Progress Payments" section provides information needed to ensure payments proceed without delay.

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

20 February 2022

Change 1
Updated ‘Documentation required from borrower’ for ‘ Licenced Builder – Fixed price contracts (Including – Renovations, Multiple Dwellings and Transportable Homes)’ to specify that ‘Builder Risk Insurance’ and ‘Council Approved Plans and Specifications’ are not required when the progress payment request is for an initial deposit (as advised by the progress payment instruction) to formalise the builder’s contract with the customer. The document will be required at the next progress payment stage
Change 2
Updated ‘Documentation required from borrower’ for ‘Owner Builder, Kit Homes and Licenced Builder Cost-Plus contracts’ to specify that for Licenced Builder Cost-Plus contracts only ‘Builder Risk Insurance’ is not required where the progress payment request is for an initial deposit (as advised by the progress payment instruction) to formalise the builder’s contract with the customer. The document will be required at the next progress payment stage
Change 3
The following clarification has been added to sections:

3.4 Licensed Builder Fixed Price > $1m
3.5 Licensed Builder Cost – plus
3.6 Owner Builder
3.8 Kit Homes

Under table heading of “using a construction valuation”

Market Value to be used as determined by Loan to Value (LVR) > LVR Calculation Policy

3 April 2022

Change 1
Update to 2.19 Progress payments not required > Renovation to an already established property - Mortgage Insurance does not apply and Loan amount or increase is: from ≤$100,000 to ≤$250’000
Change 2

Update to section 2.13 Documentation required from Borrower, tables > License Builder – Fixed price contracts and Owner Builder, Kit Homes and License Builder Cost – Plus Contracts.

Addition of Certificate of Occupancy (NSW Properties) as acceptable verification for Final Progress Payment

Old
NSW properties: Updated Survey Report evidencing that all improvements comply with the Local Government Ordinances (The survey should be updated after completion of eaves and guttering)
New
NSW properties: Updated Survey Report evidencing that all improvements comply with the Local Government Ordinances (The survey should be updated after completion of eaves and guttering) or Certificate of Occupancy

22 May 2022

Update to section 2.13 Documentation required from Borrower, tables > License Builder – Fixed price contracts and Owner Builder, Kit Homes and License Builder Cost – Plus Contracts.
now shows as; NSW properties: Certificate of Occupancy or Updated Survey Report evidencing that all improvements comply with the Local Government Ordinances (The survey should be updated after completion of eaves and guttering)

2 October 2022

Change 1
Update to content in 2.1 Lenders responsibility to inform borrowers
Old wording

The 24-month construction term, or any longer period as agreed by us in writing, is separate to the loan term that commences post construction (Refer Maximum Loan Term)

New wording

The 24-month construction term, or any longer period as agreed by us in writing, is separate to the loan term that commences post construction (Refer Maximum Loan term and Exit (Repayment) Strategy )

20 November 2022

Change 1
Updated wording in section 2.4 Licensed builder – fixed price contract
Old wording

Approval is subject to the receipt of a satisfactory residential 'Construction' valuation (refer to S ecurity Collateral Value )

New wording

Approval is subject to the receipt of a satisfactory residential full valuation report (Construction long form or Construction short form valuation) refer to S ecurity Collateral Value Assessment policy.

Change 2
Updated wording to 2.6 Cost – Plus (non-fixed price) Contracts
Old wording

Approval is subject to the receipt of a satisfactory 'Construction' valuation (refer to Security Collateral Value )

New wording

Approval is subject to the receipt of a satisfactory residential full valuation report (Construction long form or Construction short form valuation) refer to Security Collateral Value Assessment policy.

Change 3
Update to wording in 2.7 Owner Builder
Old wording

Approval subject to receipt of a satisfactory residential 'Construction' valuation (refer to Security Collateral Value )

New wording

Approval subject to receipt of a satisfactory residential full valuation report (Construction long form or Construction short form valuation) refer to Security Collateral Value Assessment policy.

Change 4
Update to wording in 2.8 Renovations / Home improvement loans
Old wording
Where the ''TBE' (To Be Erected)' value is to be relied upon for security value and progress payments are required, then, all quotations from all subcontractors (including proposed finishes and specifications) must be provided to the Bank prior to ordering the 'Construction ' valuation.
New wording
Where the ‘TBE’ (To Be Erected) value is to be relied upon for security value and progress payments are required, then;

the Bank must control the release of funds to ensure the renovations / Home Improvements work is completed, and
all quotations from all subcontractors (including proposed finishes and specifications) must be provided to the Bank prior to ordering the full valuation report (Construction long form or Construction short form valuation).

Change 5
Updated wording in section 2.11 Transportable Homes
Old wording

Approval subject to receipt of a satisfactory residential 'Construction' valuation (refer to Security Collateral Value )

New wording

Approval subject to receipt of a satisfactory residential full valuation (Construction long form or Construction short form valuation) refer to S ecurity Collateral Value Assessment policy.

Change 6
Update to content in section 2.13 Documentation required from Borrower
Old wording for table
Licensed Builder - Fixed price contracts (Including - Renovations, Multiple Dwellings and Transportable Homes)
New wording for table
Licensed Builder - Fixed price contracts (Including – Renovations where progress payments are required, Multiple Dwellings and Transportable Homes)

Change 7
Update to content in section 2.15 Changes to council approved or privately certified plans
Old wording

A short-form valuation is required to confirm the property's value against the new (amended) Council Approved Plans and Specifications.

New wording

A full valuation (short form or long form) is required to confirm the property's value against the new (amended) Council Approved Plans and Specifications.

Change 8
Change to requirements for section 2.19 Progress Payments not required as follows:
Old wording
If the loan is based on an existing or new valuation with 'as is' market value it may be eligible to be drawn without progress payments and as a single drawdown. Maximum loan amounts and any additional requirements are as per the table below 'Progress Payments not required'.

Applicants are required to provide details of work being completed e.g. loan purpose, as per Responsible lending requirements.
For applications decisioned in OBP, the residential property improvement amount is to be loaded in the system

Note: Applicants seeking an equity release (greater than the amounts appearing in the table below) against the current "as is" value of an existing property in order to undertake full or partial demolition and construction / renovation of the property without progress payments, are outside of a lenders authority to approve.
Credit may consider these scenarios where the applicants are able to show the proposed funding is sufficient to complete the project within reasonable time frames. Funding includes the customers contribution and proposed loan proceeds and should be sufficient to cover demolition, construction costs and any subdivision costs if applicable.

	Progress payments not required
New Construction	May be drawn as single drawdown if: Non-mortgaged insured loan amount or increase ≤ $50,000; or Mortgaged insured loan amount or increase ≤ $25,000 provided there is no full or partial demolition or change to existing floor plan; and The loan is not required to cover cost overruns / rectification of sub-standard work
Renovations to an already established property	May be drawn as single drawdown if: Mortgage Insurance does not apply and Loan amount or increase is ≤ $250,000, or Mortgage Insurance applies and Loan amount or increase is ≤ $25,000 provided there is no full or partial demolition or change to existing floor plan; and The loan is not required to cover cost overrun or rectification of substandard work
Owner Builder	May be drawn as single drawdown if: increase ≤ $25,000 and The loan is not required to cover cost overruns/rectification of sub-standard work

New wording
Eligibility criteria

If the loan LVR is based on the 'as is' market value in either an acceptable existing valuation or a new valuation, the loan may be eligible to be drawn as a single drawdown without progress payments. Refer to:
- the ‘Progress Payments not required’ table below for maximum loan amounts and any additional requirements.
- Loan to Value Ratio (LVR) policy for Maximum LVR
- Glossary for definition of ‘as is’ valuation
Lenders and Assessors are required to identify and record the purpose of all loan funds, refer Eligibility > Suitability Assessment under Responsible Lending
The residential property improvement amount is to be reflected in ApplyOnline.

Progress Payments not required
Scenario	Non - Mortgage insured	Mortgage Insured
Renovations to an already established property* Non-owner builder	May be drawn as single drawdown where the loan amount or increase is < $250,000 Additional requirements Can meet either definition of ‘ Renovations ’ or ‘ Additions ’ as per Glossary .	May be drawn as single drawdown where the loan amount or increase is <$100,000 Additional requirements Must meet definition of ‘ Renovation ' as per Glossary
Additions to an already established property* Non-owner builder		Not acceptable to process as a single draw down. Progress payments are required.
Owner builder*	May be drawn as single drawdown where the loan amount or increase ≤ $25,000 Additional requirements Can meet either definition of ‘ Renovations ’ or ‘ Additions ’ as per Glossary	Mortgage insured not permitted
*Note: Where the below scenarios occur the loan must be completed with progress payments: the new loan or increase is required to cover cost overruns / rectification of sub-standard work, or the ‘TBE’ (To Be Erected) value is to be relied upon for security value, or Work to be completed will reduce the living space or floor plan of the property

Change 9
Update to wording in section 3.7 Renovations / Home Improvement loans using 'Construction' valuation
Old wording
Where work is to be undertaken under a 'Construction' valuation, then the Bank must control funds to ensure the renovations / Home Improvements work is completed. Lenders are requested to ascertain the type of work to be completed i.e. internal renovation, new kitchen, bathroom, pool, extension etc., and note in loan application comments accordingly.

Process as per policy for licensed builder either ≤ $1m or > $1m contract price noting progress draws to apply.
New wording
Also see Rules > Renovations / Home improvement loans
Brokers are requested to ascertain the type of work to be completed i.e. internal renovation, new kitchen, bathroom, pool, extension etc., and note in loan application comments accordingly.
Process as per policy for licensed builder either ≤ $1m or > $1m contract price noting progress draws to apply.

19 February 2023

Change 1
Section 2.13: Documentation Required from Borrower:
Remove: “and the Bank must be noted as the mortgagee” from requirements of what the Insurance Policy or Certificate of Currency (of Insurance) must include

2 July 2023

Change 1
Policy re-write to:

re-format and re-wording of policy to improve readability

Change 2

clarification on 2.6 – Documentation Required from Borrower – Owner Builder, Kit Homes & Licenced Builder Cost-Plus contracts table – remove Council approved plans and specifications (prior to formal approval) row 12 and add ‘and specifications’ to Council Approved Plans ‘and specifications’ or Privately Certified Plans (Required to order a Valuation) row 1 due to duplication.

20 August 2023

Change 1

Clarification on 2.6 – Documentation Required from Borrower : Licenced Builder – Fixed Price Contracts (Including - Renovations where progress payments are required, Multiple Dwellings and Transportable Homes)

Under document type Signed tender dated < 12mths or Fully Executed Contract < 12mths, removed the word ‘approved' from plans and specifications there is no requirement for plans and specifications to be Council approved when ordering a valuation at Application stage.

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03.08 Document Standards

Policy ID

03.08

Policy Name

Document Standards

Policy Content

1. About this policy
1.1 Why this policy
2. Rules you must apply
2.1 Identifying verification documents, standards and additional requirements
2.2 Maximum age of documents
2.3 Acceptable and unacceptable document formats, delivery methods and suppliers
2.4 Using a combination of documents to complete verification
2.5 When supporting documents are not in English or display a currency other than AUD
2.6 Name Variations
2.7 Minimum Document Standards Table

1. About this policy

1.1 Why this policy

This policy identifies the minimum standards for supporting documents used during verification activities, including:

maximum age
format and delivery methods
who can supply the document
the minimum information to be displayed on the document according to the verification activity being performed

You must read this policy in conjunction with:

2. Rules you must apply

2.1 Identifying verification documents, standards and additional requirements

The table below specifies the actions we need to take to identify the correct verification document.

Step	Action	How to complete
1	Identify acceptable supporting document types	Refer to the relevant section of policy for the verification activity being performed, e.g.: Maximum Loan Term and Exit (Repayment) Strategy Commitments Genuine savings, Equity and Customer Contribution Self-employed applicants Verifying income Loan Application and Approval > Validation of information provided by the customer Specific policy chapters detail the acceptable supporting document types
2	Identify the minimum document standards for the document type	Refer to Minimum Document Standards Table Locate the document type Cross reference the verification activity being performed (e.g. Income) The table details the minimum standards for each document type according to the verification activity being performed Where the minimum standards vary for different verification policies, refer to the 'in all cases' row and the 'when used for' row (for specific policy)
3	Identify any additional requirements for the document type (above the minimum document standards)	Individual policy rules may require the supporting document to display information in addition to the minimum standards Refer to the relevant section of policy for the verification activity being performed, for example: Maximum Loan Term and Exit (Repayment) Strategy Commitments Genuine savings, Equity and Customer Contribution Self-employed applicants Verifying income Loan Application and Approval > Validation of information provided by the customer Specific policy chapters will detail any additional requirements for the document type. Note: Mortgage Insurers and Credit may also request additional requirements above the minimum standards

2.2 Maximum age of documents

'Maximum Age' refers to the maximum period that can elapse between the date the document was produced to the ‘Responsible Lending Start Date’. Refer to Loan Application and Approval > Responsible Lending Start Date .
Refer to the Minimum Document Standards Table to determine the maximum allowable age for a document.
Where a series of documents is required (e.g. 2 payslips) the most recent is to be dated within the limit described in Maximum age

The below definitions can be used to calculate if the document meets the maximum age.

Maximum Age	Definition
1 Month	The first day of the month up to and including the last day of the same month (e.g. 1/1/2018 to 31/1/2018) or Any day in the first month up to and including one day prior in the next month (e.g. 15/1/2018 to 14/2/2018)
2 Months	The first day of the month up to and including the last day of the following month (e.g. 1/1/2018 to 28/2/2018) or Any day in the first (given) month up to and including one day prior in the following second month (e.g. 15/1/2018 to 14/3/2018)
The same methodology may be extrapolated out to any higher number of months

2.3 Acceptable and unacceptable document formats, delivery methods and suppliers

The table below specifies the various accepted and unaccepted document formats and the delivery methods by which they may be provided to the Bank.

Document format	Acceptable	Unacceptable
Standalone document Including but not limited to: Physical document Image/photograph/screen shot PDF	Physical document Facsimile Attached or embedded within an email Obtained via a portal (such as Proviso or Mogo)-Brokers only	Documents provided via text message (SMS) An image or photograph of document taken by a Lender (internal staff or Broker) as this is not secure in the event the device is lost or stolen. Handwritten documents, except where: The Minimum Document Standards Table specifies 'can be handwritten'; or The document is a template form which has been completed by hand
Written text within the body of an email	Email, which has: been emailed directly to the Broker by the issuer, and been emailed from the issuer's email system	A document type of 'Email advice' (a document in the form of text written in the body of an email), which Has not been emailed directly to the lender by the issuer, and/or; Has been emailed from a public email address (e.g. gmail)
Internally sourced document Refers to a document sourced from internal systems by an internal staff member	Sourced internally
Subject to individual policies, the below may be permitted to supply the document to the broker: the applicant the document issuer the applicant's accountant internally supplied

Refer to the Minimum Document Standards Table to determine:

The acceptable document format for each document type
The acceptable supplier for each document type

2.4 Using a combination of documents to complete verification

It is acceptable to use either a single supporting document, or a combination of documents to complete verification activities for the following policies:

Verifying Income
Commitments ^*

^* Note: Includes the following non-discretionary expense types:

outgoing child support (maintenance) payments
outgoing alimony (spousal support)
outgoing rent / board

Where a combination of documents is used, a document override code will not be required to be entered where the below are met:

A clear link can be established between each document provided (e.g. account number matched on each document); and
The combined documents display all of the mandatory to verify requirements as specified for the verification activity being completed and documented in:

Where policy requires the verification document to include both the account holder name and account number / identifier, and the primary document does not display both, then a second verification document is required to link the primary document to the applicant. The maximum age of the ‘linking’ document is 12 months from the Responsible Lending start date.

Examples of acceptable document combinations include, but are not limited to the following:

Commitment verification – a transaction summary is provided which displays the account number but not the account holder’s name. If used in isolation, the transaction summary does not meet document standards. A second supporting document, such as an account statement (that may not meet the maximum age of document requirements for that document) may be obtained to connect the transaction summary to the applicant.
Income verification – a payslip does not detail the period the payslip covers, however an internal system extract confirms the applicant is paid weekly. The internal system extract can be used as the second supporting document.

2.5 When supporting documents are not in in English or display a currency other than AUD

In all cases where the supporting documents are not in English or a currency other than Australian dollars (AUD) is displayed on the document, the Foreign currency translation checklist is to be completed.

Where the supporting documents are in a language other than English:

The applicant is to supply both the original document and an English translation prepared by an accredited translator at their own cost.
The translated document is to be stamped with translators NAATI stamp

2.6 Name variations

The names of borrowers and guarantors must be correct in ApplyOnline.

Where a verification document(s) shows a name mismatch to the loan origination system, policy allows minor name variations to be accepted without referring to Credit or applying an override.

The tables below list a number of acceptable name variation scenarios / examples and are intended as a guide only, i.e. they should not be taken as the only allowable scenarios / examples.

Category 1: Minor name discrepancies
Where verification document is used for Income and/or Commitments .

Scenario	Verification document shows:	Legal Name	Requirements to be acceptable under policy
Full name not shown	Jane Doe	Jane Anne Doe	No further action required The name variation is minor and can be accepted without obtaining a further verification document or entering a comment in the loan origination system
Middle name shown as an initial	Jane A. Doe	Jane Anne Doe
Hyphen is either: not shown; or shown	Jane-Anne Doe	Jane Anne Doe
Hyphen is either: not shown; or shown	Yiling Wang	Yi-Ling Wang
Name split is not shown correctly	Ching Yu Chan	Chingyu Chan
Name split is not shown correctly	Yiling Wang	Yi Ling Wang
Shortened or common name	Bob Brown	Robert Brown
Names listed out of order e.g. surname listed first	Kumar, Dhruv	Dhruv Kumar

Category 2: Customer has formally changed their name

Scenario

Verification document shows:

Legal name

Requirements to be acceptable under policy

Name change

Clint East

John West

Further enquiries are to be made.

The verification document is acceptable where:

The name on the verification document can be linked to the legal name of the borrower (or guarantor) via Change of Name certificate;

AND

The certificate is uploaded to OBP

Married, birth or former name used

Joan Single

Joan Married

Further enquiries are to be made.

The verification document is acceptable where:

The name on the verification document can be linked to the legal name of the borrower (or guarantor) via a copy of marriage certificate or birth certificate;

AND

The certificate is uploaded to OBP

Category 3: Employer Name

Scenario	Income verification document shows:	Legal name	Requirements to be acceptable under policy
Employer name shortened or abbreviated variation	Westpac or WBC	Westpac Banking Corporation	No further action required The name variation is minor and can be accepted without obtaining a further verification document or entering a comment in the loan origination system.
Employer name shortened or abbreviated variation	ABCD or ABCD Pty Ltd	ABCD Propriety Limited
Missing Propriety Limited or Pty Ltd	George Cleaning	George Cleaning Services Pty Ltd
Other name shortenings	Cleaning Aust.	Cleaning Australia
Employer / supplier differs E.g. business or trading name of the controlling company	BankSA	Westpac Banking Corporation	The verification document is acceptable where: The legal name can be verified via an alternate document or source, e.g. ABN search OR A comment is added to the loan origination system justifying the acceptance of the name variation / document Note: If an additional supporting document is obtained it must be uploaded to OBP.
Employer name missing	No employer name	Westpac Banking Corporation	The verification document is acceptable where: The legal name can be verified via an ABN search

Category 4: Other name discrepancy examples

Where verification document is used for Income and/or Commitments

Name Variance	Verification document shows :	Legal name	Requirements to be acceptable under policy
Use of initial and surname	J. Doe	Jane Anne Doe	The verification document is acceptable where: The name on the verification document can be linked to the legal name of the borrower (or guarantor) via an alternate source or another acceptable document. E.g. the amount on the payslip is credited to an account in their legal name (verified to internal system extract or enquiry or account statement) AND A comment is entered in the loan origination system justifying acceptance of the name variation / document Note: If an additional supporting document is obtained it must be uploaded to OBP.
Use of a middle name instead of first name	Anne Smith	Mary Anne Smith
Surname only listed	Khoury	Nour Khoury
Nickname used	Ironman Smith	Simon Smith
Adopted or anglicised name where differs to legal name	John Wang	Zhang Wang

Unacceptable Name Variations

Verification document	Legal name	Issue	Requirements to be acceptable under policy
Alfred Jones	John Smith	False name used to conceal an identity	Do not proceed with loan application

2.6 Minimum Document Standards Table

The table specifies minimum standards related to verification documents:

Acceptable document format
Maximum age of the document
Who can supply the document to the Lender (internal staff or broker)
The minimum information to be displayed on the document according to the verification activity being performed

You must also refer to individual policies to determine any requirements above the minimum documented in this table.

Note: Where a supporting document being used to complete a verification activity, as required in Verifying Income or Commitments, does not contain all the mandatory information to be displayed on the document on its own, according to the verification activity, refer Using a combination of documents to complete verification

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Account Statement
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the account is open / active	2 months
	When the account is closed	No maximum age
Document must display	In all cases	Issuer name or logo Account holder/s name matching the applicant BSB and account number³ or account identifier³
	When the account is open / active	The period over which the information applies Any credit and or debit transaction displayed must also include: Date Amount Narrative (not required for foreign statements) Current or closing balance
	When the account is closed	Date Narrative must confirm account is closed
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Account Summary / Extract / Overview If this document meets the 'Document must display' requirements of an 'Account statement', it may be used as an 'Account statement'
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the account is open / active	2 months
	When the account is closed	No maximum age
Document must display	In all cases	Issuer name, logo, or stamp Account holder/s name matching the applicant^1,3 BSB and account number¹ or account identifier^1,3
	When the account is open / active	The period over which the information applies Date⁴ Note: 'The period over which the information applies' can be used to determine the date
	When the account is closed	The period over which the information applies Date⁴ Note: 'The period over which the information applies' can be used to determine the date
Used for	Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Account Transaction listing If this document meets the 'Document must display' requirements of an 'Account statement', it may be used as an 'Account statement'
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the account is open / active	2 months
	When the account is closed	No maximum age
Document must display	In all cases	Issuer name, logo, or stamp (not required for Internal² Accounts) Account holder/s name matching the applicant¹ (not required for Internal²Accounts) BSB and account number^1,3 or account identifier^1,3 (For internal ² accounts, the number must be matched to the applicant)
	When the account is open / active	The period over which the information applies Any credit and / or debit transaction displayed must also include: date amount narrative
	When the account is closed	Date⁴ Narrative must confirm account is closed Note: 'The period over which the information applies' can be used to determine the date
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Accountants Letter
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Issuer letterhead Issuer Signature Name matching the applicant (or entity if it relates to our applicant/s business or a company/trust) The first and last name of the accountant who is making the declaration Date
Used for	Verifying Income Self-employed Applicants

Accountants email advice
Acceptable Document Format	Written text within in the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Name matching the applicant (or entity if it relates to our applicant/s business or a company/trust) The first and last name of the accountant who is making the declaration Date⁵ Issued from the accountancy firm's email system
Used for	Verifying Income Self-employed Applicants

Annuity provider's letter
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Latest issued to a maximum 12 months
Document must display	Issuer’s letterhead Recipient name matching the applicant Payment amount per cycle Term of the payment or balance of the fund Date
Used for	Verifying Income

Annuity provider's email advice
Acceptable Document Format	Written text within in the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	Latest issued to a maximum 12 months
Document must display	Recipient name matching the applicant Payment amount per cycle Term of the payment or balance of the fund Date Issued from the provider's firm email system
Used for	Verifying Income

Australian Business Number (ABN) Registration Search
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	2 months
Document must display	ABN Entity name Date
Used for	Verifying Income Self-employed Applicants

Australian Taxation Office (ATO) Income statements
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	'TAX READY' income statement	End of last financial year after 31 August it is mandatory to supply previous 30 June income statement
	'YTD' income statement	2 months
Document must display	Employer name Employer ABN Employee name matching the applicant Date
Used for	Verifying Income

Australian Taxation Office Letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	Current document to a maximum of 12 months
Document must display	Issuer letterhead or logo Name matching the applicant (or entity) Date
Used for	Commitments

Australian Taxation Office Notice of Assessment (ATO NOA)
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	End of last financial year after 15 May it is mandatory to supply previous 30 June tax NOA
Document must display	Name matching the applicant (or entity) Date
Used for	Verifying Income Genuine Savings, Equity and Customer Contribution Self-employed Applicants Serviceability Assessment > Apportioned household expenses and shared commitments - Spousal same household

Australian Taxation Office Pre - Filling report (ATO Pre-Filling report)
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	End of last financial year after 15 May it is mandatory to supply previous 30 June Finalised Pre-Filling report
Document must display	Name matching the applicant Employer name Employer ABN Single Touch Payroll Status' indicates 'Finalised' Date
Used for	Verifying Income

Australian Taxation Office Portal Document
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	Current document
Document must display	Issuer’s letterhead or logo Name matching the applicant (or entity)
Used for	Commitments

Australian Taxation Office Superannuation ‘Fund details’ extract from myGov Portal
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	End of last financial year after 31 October the ‘Date Reported’ must display the most recent ended financial year
Document must display	Name matching the applicant (or entity) Reported Super Balance Date reported
Used for	Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Australian Tax Return (Can be handwritten)
Acceptable Document Format	Standalone document Individual returns must be supported by ATO NOA
Customer	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	End of last financial year after 15 May it is mandatory to supply previous 30 June tax return
Document must display	Name matching the applicant (or entity) Date
Used for	Verifying Income Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Australian Tax Return lodgement extract from MyGov Portal
Acceptable Document Format	Standalone document
Customer	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	2 months from the date of lodgement
Document must display	Name matching the applicant (or entity) ATO receipt number Date of lodgement Note: If an ‘Assessment issued’ field is displayed on the document, there must be no date displayed against it
Used for	Verifying Income Self-employed Applicants

Business Activity Statement (BAS) (Can be handwritten)
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer or accountant
Maximum Age at Responsible Lending start date	End of most recent quarter and matching quarter from the previous financial years. E.g., As of 31st July. BAS for period ending 30 Jun must be provided
Document must display	Name matching the: applicant; or trading name; or entity name The period over which the information applies ABN
Used for	Self-employed Applicants

Buy Now Pay Later provider document from digital application or internet site
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Account holders name matching the applicant Transaction/facility identifier³ for each active transaction Provider name or logo Date⁴
Used for	Commitments

Child Support Assessment extract from myGov Portal
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	3 months Assessment period must cover a future date
Document must display	In all cases	Nature of payment Payment amount per cycle Date
	When used for Verifying Income	Recipient name matching the applicant Number of dependants related to the payment being received
	When used for Commitments	Payor name matching the applicant
Used for	Commitments Verifying Income

Comprehensive Credit Report (CCR) Also known as the Credit Bureau Report
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	60 days System will automatically refresh when generated by OBP
Document must display	Name matching the applicant (or entity) Account identifier³ and credit provider name matching the system when used to assess repayment history and/or details of a specific commitment Date when manually generated outside of OBP
Used for	Commitments Serviceability Assessment > Amended current commitment Loan Application and Approval > Validation of information provided by the customer

Contract of Sale (Property Purchase Contract)
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When used to verify purchase details	Dated within 3 months of the date of the loan application
	When used to verify rental income	Current for the Transaction
Document must display	In all cases	Property address Real Estate Agents details Date
	When used to verify purchase details	Purchase price Name(s) of the vendor(s) title details Name(s) of the purchaser(s) Signed by Purchaser and / or Vendor Refer to Security Collateral Value Assessment > Contract of Sale (Purchase price) Details of chattels and other items included in the purchase price (if applicable) Refer to Security Collateral Value Assessment > Contract of Sale (Purchase Price) Any annexure, special conditions, or schedule (where applicable) Lease / Leaseback arrangements (if applicable)
	When used to verify rental income	Name of the purchaser(s) matching the applicant (or entity) Tenancy section completed Rental amount per cycle
Used for	Security Collateral Value Assessment Acceptable Security Collateral Maximum loan term and Exit (Repayment) Strategy Construction loans Verifying Income

Council rates notice
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	3 months
Document must display	Name of property owner Property address Issuer name Date
Used for	Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Court order
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current
Document must display	Payor name matching the applicant Issuer name Nature of payment Payment amount per cycle Date
Used for	Commitments

Credit Contract
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current
Document must display	Account holders name matching the applicant¹ Account number^1,3 or account identifier^1,3 Issuer name Issuer ABN or ACLN Date
Used for	Commitments

Credit provider's letter
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the facility / account is open / active	2 months
	When the facility / account is closed	No maximum age
Document must display	In all cases	Account holders name matching the applicant ¹ Account number^1,3 or account identifier^1,3 Issuer name Issuer ABN or ACLN Date
	When the facility / account is closed	Commentary confirming the facility / account is cancelled or closed
Used for	Commitments

Credit provider's email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	When the facility / account is open / active	2 months
	When the facility / account is closed
Document must display	In all cases	Account holders name matching the applicant ¹ Account number^1,3 or account identifier^1,3 Issued from the provider's firm email system (not a public email address-e.g., gmail). Date⁵
	When the facility / account is closed	Commentary confirming the facility / account is cancelled or closed
Used for	Commitments

Department of Home Affairs Visa Grant Approval Letter
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	Latest issued
Document must display	Issuer’s letterhead Name matching the borrower (or guarantor) Visa class / subclass number Date
Used for	Lending to Non-Australian Citizens

Deposit receipt issued by Builder / Developer or Real Estate Agent
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Current for the transaction
Document must display	Name of the Builder / Developer or Real Estate Agent Payee name matching one or more of the borrowers Amount paid Date
Used for	Genuine Savings, Equity and Customer Contribution

Dividend advice
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Latest issued to a maximum 12 months
Document must display	Issuer name Number of shares held Recipient name matching the applicant Date
Used for	Genuine Savings, Equity and Customer Contribution

Employer's letter General use
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Employer letterhead Employer signature Employer ABN* Employee's name matching the applicant Gross income Date * Excludes: Australian Government body / departments, refer Glossary , and Foreign employers who are not registered in Australia
Used for	Verifying Income Serviceability Assessment > Parental leave – use of ‘return to work’ income

Employer's email advice General use
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Employee's name matching the applicant Gross income Issued from the employer's firm email system Date⁵
Used for	Verifying Income

Employer's letter Partners from selected companies
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Employer letterhead Partner's name matching the applicant Length of service Previous financial year's gross income Confirmation that the applicant is a partner of the firm Date
Used for	Verifying Income

Employer's email advice Partners from selected companies
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Partner's name matching the applicant Length of service Previous financial year's gross income Confirmation that the applicant is a partner of the firm Issued by the firm's administration manager or equivalent Issued from the firm's email system Date⁵
Used for	Verifying Income

Employment Contract For general use
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current
Document must display	Name matching the applicant Applicant’s signature Signature of personnel staff or management staff of the employer Contract term Contract expiry date Remuneration amount Payment frequency
Used for	Verifying Income Lending to Non-Australian Citizens

Employment Contract Professional sportsperson
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current
Document must display	Sportsperson's matching the applicant Applicant’s signature Signature of personnel staff or management staff of the employer Contract term Contract expiry date Remuneration amount Payment frequency Non-cash income components (if any) Conditions relating to payment (if any)
Used for	Verifying Income

Executors letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	12 months
Document must display	Issuer's letterhead Issuer's signature Name of beneficiary matching the applicant Payment amount Date
Used for	Genuine Savings, Equity and Customer Contribution

Executors email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Name of beneficiary matching the applicant Payment amount Issued from the provider's firm email system Date⁵
Used for	Genuine Savings, Equity and Customer Contribution

Financial statements (Refers to Profit and Loss Statement AND Balance Sheet)
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	End of last financial year after 15 May it is mandatory to supply previous 30 June financials
Document must display	Name matching the applicant (or entity) Note: If only an ACN/ABN displayed an ACN/ABN search must be obtained confirming the entity name-not required for foreign statements) Years Reflected
Used for	Verifying Income Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Industry Specialisation Sector Special Packages – Medico Sector Self-employed Applicants

Foreign tax return (including any related financial statements)
Acceptable Document Format	Stand-alone document
Acceptable Supplier	Issuer or customer or accountant
Maximum Age at Responsible Lending start date	18 months
Document must display	Name matching the applicant Years reflected
Used for	Verifying Income > Foreign income and employment

Government letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	3 months
Document must display	In all cases	Issuer name (i.e., government department) Nature of payment Payment amount per cycle Date
	When used for Verifying Income	Recipient name matching the applicant Number of dependants related to the payment being received
	When used for Commitments	Payor name matching the applicant
Used for	Verifying Income Commitments

Interim financials
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer or accountant
Maximum Age at Responsible Lending start date	2 months
Document must display	Name matching the applicant (or entity) Prepared by a certified accountant Date
Used for	Verifying Income Self-employed applicants

Internal² system extract or enquiry (e.g., SAMKIT, CIS, MSS, CIS, STaR, Service Online, Lender Assist, Hogan, LIS)
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	No older than Responsible Lending start date
Document must display	Account number or account identifier³ that can be matched to the applicant. Period over which the information applies
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Investment certificate
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Latest issued to a maximum 12 months
Document must display	In all cases	Certificate holder name matching the applicant Issuer name Investment value Date
	When used for Verifying income	Payment amount
Used for	Verifying Income Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Lease provider’s document
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	When the document is a Lease Credit	current document
	All other lease provider documents	2 months
Document must display	Lease reference number³ or payor name matching the applicant Provider name or logo Date
Used for	Commitments

Lease provider's email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Lease reference number³ or payor name matching the applicant Issued from the provider's firm email system Date⁵
Used for	Commitments

Licensed real estate property manager's/agent's letter or letting agent's letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	In all cases	Issuer's letterhead Rental property address Date
	When used for Verifying Income	Estimated rental amount per cycle
	When used for Commitments	Tenant name matching applicant Actual rental amount per cycle
	When used for Genuine Savings, Equity and Customer Contribution	Tenant name matching applicant Name/s of all tenant/s as per the tenancy agreement Actual rental amount per cycle Confirmation of rental payment history (6 months for Tier 1 genuine savings and 3 months for Tier 2)
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution

Licensed real estate property manager's/agent's email advice or letting agent's email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	In all cases	Rental property address Issued from the provider's firm email system Date⁵
	When used for Verifying Income	Estimated rental amount per cycle
	When used for Commitments	Tenant name matching applicant Actual rental amount per cycle
	When used for Genuine Savings, Equity and Customer Contribution	Tenant name matching applicant Name/s of all tenant/s as per the tenancy agreement Actual rental amount per cycle Commencement date of tenancy Confirmation of rental payment history 6 months for Tier 1 genuine savings and 3 months for Tier 2
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution

Managed fund statement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Most recent annual statement after 31 October it is mandatory to supply the statement for the most recently ended financial year
Document must display	In all cases	Issuer name or logo Name of fund holder matching the applicant¹ Account number^1,3 or member number^1,3 Investment value Date
	When used for Verifying Income	Payment amount
Used for	Verifying Income Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

PAYG Payment Summary (Can be handwritten)
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	End of last financial year after 31 August it is mandatory to supply previous 30 June Payment summary
Document must display	Employer name Employer ABN Employee name matching the applicant Date
Used for	Verifying Income

Payslip
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	When used for Verifying Income	Pay date or end of payment cycle (whichever is most recent) can be used as the age of the payslip 12 months when used to verify Bonus Income. otherwise 2 months, or 4 months when: supported by current account statement or account transaction listing or account summary / extract / overview : meeting the minimum standards for that document, and evidencing: source is consistent with payslip. Employer is the same, and frequency of deposit is consistent with pay cycle, and amount credited to account is equal to or greater than net amount shown on payslip (where amount credited is greater, the amount shown on payslip applies)
	When used for other purposes	2 months Pay date or end of payment cycle (whichever is most recent) can be used as the age of the payslip
Document must display	Employer name Employer ABN* Employee name matching the applicant Period the payslip covers (e.g., weekly fortnightly, monthly) Base salary (if applicable) Gross salary for this pay period Net salary for this pay period Tax paid YTD figures (if YTD payslip) Pay date or end of cycle date * Excludes: Australian Government body / departments, refer Glossary , and Foreign employers who are not registered in Australia
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution

Private lender's letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Full name of the lender Signed by the lender Name of the debtor matching the applicant Term of the payment or balance of the fund Date
Used for	Commitments

Private pension provider’s letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Latest issued to a maximum 12 months
Document must display	Issuer's letterhead Recipient name matching the applicant Payment amount per cycle Term of the payment or balance of the fund Date
Used for	Verifying Income

Private pension provider’s email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	Latest issued to a maximum 12 months
Document must display	Recipient name matching the applicant Payment amount per cycle Term of the payment or balance of the fund Issued from the provider's firm email system Date⁵
Used for	Verifying Income

Rental / lease agreement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current document to a maximum of 12 months where used in isolation Note: where the document exceeds age of document requirements, it can be used in combination with another supporting document (e.g. transaction listing evidencing the rental deposits to an account, that can be linked to the rental / lease agreement), refer to Using a combination of documents to complete verification
Document must display	In all cases	Rental property address Signed by tenant and landlord Rental amount per cycle Date
	When used for Commitments	Tenant name matching applicant
Used for	Verifying Income Commitments

Rental ledger from licensed real estate property manager / letting agent
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	In all cases	Tenant name matching applicant Rental property address Rental amount per cycle Date
	When used for Genuine Savings, Equity and Customer Contribution	Full name/s of tenant/s as per the tenancy agreement Confirmation of rental payment history
Used for	Commitments Genuine Savings, Equity and Customer Contribution

Rental statement from licensed real estate property manager / letting agent
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Property owner name matching applicant Rental property address Rental amount per cycle Date
Used for	Verifying Income

Salary packaging provider’s document
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Lease reference number³ or payor name matching the applicant Provider name or logo Date
Used for	Commitments

Salary packaging provider's email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Lease reference number³ or payor name matching the applicant Issued from the provider's firm email system Date⁵
Used for	Commitments

Settlement statement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	3 months
Document must display	Purchaser’s name matching the applicant Property address/identifier Date
Used for	Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Self-employed applicants Serviceability Assessment > Excluded mortgage liability

Share registry statement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Name of share holder Number of shares held ASX code Issuer name Date
Used for	Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Statutory declaration
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	2 months
Document must display	In all cases	Witnessed by an authorised party Date
	When used for: Genuine savings, Equity and Customer contribution Construction Loans Guarantees	Name of the applicant Signed by the applicant making the declaration
	When used for Commitments > Family loans / Private debt commitment verification	Name of the individual making the declaration matching the lender Signed by the lender Name of the debtor matching the applicant
Used for	Commitments Genuine Savings, Equity and Customer Contribution Construction Loans Guarantees

Statement of advice (SOA) or Record of advice (ROA) (from a financial advisor / planner)
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer or Financial Planner/Advisor
Maximum Age at Responsible Lending start date	Current
Document must display	Name of the individual that receives the advice Projected superannuation balance up to the borrower's intended retirement age Issuer's letterhead Issuer's ABN and AFL number (Australian Financial services License number) Issuer's signature Authorised representative number Date
Used for	Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Superannuation fund letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Income verification, Latest issued to a maximum 12 months Genuine savings verification=,2 months
Document must display	In all cases	Issuer's letterhead Name of fund holder matching the applicant Date
	When used for Verifying Income	Payment amount per cycle Term of the payment or balance of the fund
	When used for Genuine Savings, Equity and Customer Contribution	Amount
Used for	Verifying Income Genuine Savings, Equity and Customer Contribution

Superannuation fund email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	Income verification, Latest issued to a maximum 12 months Genuine savings verification, 2 months
Document must display	In all cases	Name of fund holder matching the applicant Issued from the provider's firm email system Date⁵
	When used for Verifying Income	Payment amount per cycle Term of the payment or balance of the fund
	When used for Genuine Savings, Equity and Customer Contribution	Amount
Used for	Verifying Income Genuine Savings, Equity and Customer Contribution

Superannuation fund statement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	Latest Issued statement (after 31 October it is mandatory to supply the statement for the most recently ended financial year)
Document must display	Issuer name or logo Name of fund holder matching the applicant¹ Account number^1,3 member number^1,3 Account balance Date
Used for	Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Superannuation fund account summary
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or Customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Issuer name or logo Name of fund holder matching the applicant¹ Account number^1,3 or member number^1,3 Account balance Date
Used for	Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Foreign currency translation checklist
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	2 months
Document must display	Name matching the applicant All mandatory checklist fields have been completed
Used for	Verifying Income Commitments Lending to Non-Australian Citizens

Title search
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	90 Days
Document must display	Name of property owner Date
Used for	Genuine Savings, Equity and Customer Contribution Acceptable Security Collateral Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Guarantees

Utility bill
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	3 months
Document must display	Issuer name or logo Name of property owner Property address Date
Used for	Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens

Valuation report with rental estimate
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	3 months
Document must display	Rental property address Estimated rental amount per cycle Date
Used for	Verifying Income

Vevo Visa Details Check
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Issuer Name Name matching the borrower (or guarantor) Visa class / subclass number Date
Used for	Lending to Non-Australian Citizens

Westpac Property Report (Obtained via Property Hub or RPData)
Acceptable Document Format	Internally sourced document
Acceptable Supplier	Internally supplied
Maximum Age at Responsible Lending start date	3 months
Document must display	Property address Estimated property value Date
Used for	Maximum Loan Term and Exit (Repayment) Strategy

X
Y
Z

Legend
1	If the document does not display both the 'facility’ number/identifier and the ‘facility’ holder’s/recipient’s name, then a second verification document will be required to enable you to link the primary document to your applicant. The maximum age for the 'linking' document is 12 months from Responsible Lending start date.
2	SGB / BoM / BSA and RAMS are considered to be external providers
3	Truncated facility numbers identifiers are acceptable if at least the last 4 numbers are visible e.g. xxxx xxxx xxxx 0351)
4	For screenshots: If the issuer displays a date within the screenshot, this date is to be used If the issuer has not displayed a date within the screenshot, the screenshot capture date (from the mobile device or computer) is to be present and used
5	If the document does not specify a date, the date of the email can be used as the age of the document

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

21 November 2021

New version 9.0 of MDSM attached.
New document type added, ATO Pre-filling report, able to be used for income verification.

22 May 2022

Change 1
Updated section ‘Maximum age of documents’. Document age will be measured from the ‘Responsible Lending Start date’ (previously measured from “Full Application date’)
Change 2
New version 10. of MDSM attached
Change 3
Deleted section ‘Full Application Date definition’

17 July 2022

New version 11.0 of MDSM attached - refer to MDSM for details of change

21 August 2022

Change 1
Three new document types added

Australian Taxation Office Superannuation ‘fund details’ extract from myGov portal. Can be used to verify exit strategy.
Department of Home Affairs Visa Grant Approval letter
Vevo Visa Details Check

One document removed

Proloan Overtime and or LVR.90% Declaration

Change 2
Policy and Procedure Re-Write

Change 3
Change from ‘Deed Poll’ to ‘Name change certificate’

2 October 2022

Change 1
Under section ‘Minimum Document Standards Table’:

Moved the rules under sub-section ‘Rules to apply to all applicable documents’ to a new ‘Legend’ table at the bottom of the document
Deleted below redundant footnotes and re-numbered remaining footnotes:
- #2 'Letter' means 'in the form of a stand alone document' (which can be attached to an email)
- -#3 "Email advice' means 'in the form of text within the body of an email'
- -#5 If both account number and account name are not present, you must be able to match the document to the applicant
Deleted section heading ‘Rules to apply to all applicable documents’
For all document types listed:
- Created links between existing footnotes and the ‘new ‘Legend’ table’
- Deleted the row titled ‘Refer to Rules to apply to all applicable documents’ (superseded by links created above)
- Wherever footnote # 1 already applied to a document, corrections made to ensure that #1 is included against both 'facility' number/identifier and 'facility' name fields (house-keeping change)
Updated the below documents to allow truncated numbers:
- Account statement, Account summary / extract / overview, Account transaction listing, 'Buy Now Pay later' provider document from digital application or internet site (For fixed term facilities), Comprehensive Credit Report (CCR), Credit contract, Credit provider's letter, Credit provider's email advice, Internal system extract or enquiry, Lease provider's document, Lease provider's email advice, Managed fund statement, Salary packaging provider's document, Salary packaging provider's email advice, Superannuation fund statement, Superannuation fund account summary
Added footnote 1 to the below documents (correction of accidental deletions in last update)
- Credit provider's letter, Superannuation fund statement, Superannuation fund account summary

Change 2
Updates to:

Australian Taxation Returns - Add- can be handwritten
BAS - Add - can be handwritten
Contract of sale - Add -Name of the purchaser(s) matching the applicant (or entity)
Dividend advise - Add - Number of shares held, and Amend ‘Payment amount’ to ‘Private Wealth’ only
Employers Letter (Partners of selected firm) - Add - date
Financial Statements - Amend date to years reflected
Foreign tax return - Amend date to years reflected
Payslip - Add - Pay date or end of cycle date
Settlement Statement - Amend - Can be used for commitments
Statement of advice (SOA) or Record of advice (ROA) (from a financial advisor / planner) - Amend - Acceptable Supplier to Customer or Financial Planner/Advisors

Change 3

Change policy references from ‘Migrant lending’ to new policy name ‘Lending to Non-Australian Citizens’

Change 4
Policy correction, content altered when transferred from MDSM
Document type – Contract of sale (property purchase contract) When used to verify purchase details
Maximum age at responsible lending start date
Old wording
Current for the transaction
New wording
Dated within 3 months of the date of the loan application
Change 5
Policy correction, document type names were changed when content transferred from MDSM
Incorrect wording
Employer’s contract – for general use
Employer’s contract – Executive
Employer’s contract – Professional sportsperson
Correct wording
Employment contract – for general use
Employment contract – Executive
Employment contract – professional sportsperson

20 November 2022

Change 1
Under section ‘Minimum Document Standards Table’:

Update to Documents must display for “Credit Contract” and “Credit Provider Letter”
- Old Wording - Issuer ABN and ACLN
- New Wording- Issuer ABN or ACLN

Change 2
New section added 2.4 When supporting documents are not in English or display a currency other than AUD
In all cases where the supporting documents are not in English or a currency other than Australian dollars (AUD) is displayed on the document, the Foreign currency translation checklist is to be completed.
The Foreign currency translation checklist is part of the Home Lending Toolkit Calculator. OBI > Business Services > Home Lending > lending Tools: WBC / SBG / BoM / BSA
Where the supporting documents are in a language other than English:

The applicant is to supply both the original document and an English translation prepared by an accredited translator at their own cost.
The translated document is to be stamped with translators NAATI stamp

Translation of documents by either a Westpac Group staff member or a Westpac Group Finance Broker is not permitted. Refer https://www.naati.com.au/# for a list of translators in your local area (click on the "online directory").

Change 3
Document renamed from ‘Translation checklist’ to ‘Foreign currency translation checklist’ this update has been made to reflect the name used in the Home lending toolkit calculator.

Change 4
The below document types have been merged under a single heading:
Old

Contract of sale (property purchase contract) When used to verify purchase details – see below for use to verify rental income
Contract of Sale (Property Purchase Contract) When used to verify rental income – see above for use to verify purchase details

New

Contract of Sale

Change 5
For each document type, the ‘used for’ section has been updated to reflect the actual related policy name chapter

Change 6
There has been some reformatting of the content in ‘Document must display’ section for some document types. Primarily where there are different display rules for different related policies. The rules have not changed, only the way the information has been presented.

Change 7
Four new document types added:

Australian Taxation Office Study and Support Loan (STSL) Statement extract from myGov Portal – For Proloan Lending Policy (WBC Brand Only)
Child Support Assessment extract from myGov Portal
Deposit receipt issued by Builder / Developer or Real Estate Agent
Australian Tax Return lodgement extract from MyGov Portal

Change 8

Under section:
- ‘Minimum Document Standards Table’:
  - Added document type ‘Australian Tax Return lodgement extract from MyGov Portal’
- ‘Acceptable and unacceptable document formats, delivery methods and suppliers > Documents supplied to the Lender (internal staff) by a referrer’, added document and wording highlighted in bold:

‘Only where:

- - The referrer is the customer's accountant
    and
    - The supporting document is an Australian Tax Return supported by:
      - an Australian Tax Office Notice of Assessment, or
      - Australian Tax Return lodgement extract from MyGov Portal’

19 February 2023

Change 1
New sub-section added ‘2.4 Using a combination of documents to complete verification’
(Note due to adding new section the remaining sections in this chapter have been renumbered)
New content
Using a combination of documents to complete verification
It is acceptable to use either a single supporting document, or a combination of documents to complete verification activities for the following policies:

Verifying Income
Commitments^*

^* Note: Includes the following non-discretionary expense types:

outgoing child support (maintenance) payments
outgoing alimony (spousal support)
outgoing rent / board

Where a combination of documents is used, a document override code will not be required to be entered where the below are met:

A clear link can be established between each document provided (e.g. account number matched on each document); and
The combined documents display all of the mandatory to verify requirements as specified for the verification activity being completed and documented in:
- Verifying Income
- Commitments
- Document Standards

Where policy requires the verification document to include both the account holder name and account number / identifier, and the primary document does not display both, then a second verification document is required to link the primary document to the applicant. The maximum age of the ‘linking’ document is 12 months from the Responsible Lending start date
Examples of acceptable document combinations include, but are not limited to the following:

Commitment verification – a transaction summary is provided which displays the account number but not the account holder’s name. If used in isolation, the transaction summary does not meet document standards. A second supporting document, such as an account statement (that may not meet the maximum age of document requirements for that document) may be obtained to connect the transaction summary to the applicant.
Income verification – a payslip does not detail the period the payslip covers, however an internal system extract confirms the applicant is paid weekly. The internal system extract can be used as the second supporting document.

Where the combination of documents supplied do not include all of the mandatory information required to enable the verification activity to be completed, lenders / assessors must obtain an alternate acceptable document.
If no other acceptable document is available, the broker / assessor may refer the application to Credit for consideration, where supported by strong mitigants and justification within application comments.

Change 2
Update and rewording of content in section 2.5 Name Variations
Old wording
The names of borrowers and guarantors must be correct in the loan origination system.

While an exact name match of verification documents to the loan origination system is preferable, it is possible for minor discrepancies to be accepted. The intent of this policy is to allow minor name variations.

The list is intended as a guide and should not be taken as the only allowable scenarios / examples.

Name variation acceptable under policy - without further verification
Scenario / example	Requirements to be acceptable under policy
Borrower / guarantors name not shown in full E.g. Middle names missing Verification document shows Jane Doe Correct name in origination system is Jane Anne Doe E.g. Middle name shows as an initial Verification document shows Jane A. Doe Correct name in origination system is Jane Anne Doe E.g. Hyphen shows which is applicable or not applicable Verification document shows Yang-yu Chen Correct name in origination system is Yang Yu Chen E.g. Name split is not shown correctly Verification document shows Yiling Wang Correct name in origination system is Yi Ling Wang E.g. Name split is not shown correctly Verification document shows Ching Yu Chan Correct name in origination system is Chingyu Chan E.g. use of shortened or common name Verification document name Bob Brown Correct name in origination system is Robert Brown E.g. Names listed out of order such as surname listed first where there is an indication of which is the surname Verification document shows KUMAR, Dhruv Correct name in origination system is Dhruv Kumar	The list is intended as a guide and should not be taken as the only allowable scenarios / examples. The name variation is minor and can be accepted without a further verification document or comment in the loan origination system.
Employer / supplier name shortened or abbreviated variation when compared E.g. Verification document shows Westpac Banking Corporation Loan application and or origination system shows Westpac or WBC E.g. Propriety Limited shown as Pty Ltd E.g. Propriety Limited or Pty Ltd are not showing Loan application and or origination system shows as ABCD Correct name is ABCD Propriety Limited E.g. Word or words missing Loan application and or origination system shows as George Cleaning Correct name is George Cleaning Services Pty Ltd E.g. Other name shortenings Australia shown as Aust. Plural term missing or included in error	The list is intended as a guide and should not be taken as the only allowable scenarios / examples. The name variation is minor and can be accepted without a further verification document or comment in the loan origination system. Note: It is best practice to ensure employer entered in originations matches employer name as stated on payslips

Name variation acceptable under policy - with another document or comment.
Scenario / example	Requirements to be acceptable under policy
Borrower / guarantors name differs in a minor way. E.g. Verification document name Andy Wang Pay credited to an account in name of Zhang Wang Correct name in origination system is Zhang Wang E.g. Use of initial and surname Verification document shows initial and surname such as J. Doe Correct name in origination system is Jane Anne Doe E.g. Use of a middle name instead of a first name Verification document shows Anne Smith Correct name in origination system is Mary Anne Smith	The list is intended as a guide and should not be taken as the only allowable scenarios / examples. The name variation may be accepted when: Name can be verified via an alternative source e.g. Amount on payslip is credited to an account in the correct name or A comment is added to the loan origination system justifying acceptance of the name variation /document
Borrower / guarantors name differs E.g. Birth or former name used but marriage certificate held linking to name in loan application Verification document shows Joan Single Correct name in origination system is Joan Married	Marriage certificate held showing Single to Married
Borrower / guarantors name differs E.g. Alternate name used but name change certificate held linking to name in loan application Verification document shows Clint East Correct name in origination system is John West	Name change certificate held showing name change
Employer / supplier differs E.g. business or trading name of the controlling company Loan application and or origination system shows employer as BankSA Verification document shows Westpac Banking Corporation	Name can be verified via an alternative source e.g. ABN search held confirming link between names or other information on payslip provided links with loan application or origination system or A comment is added to the loan origination system justifying acceptance of the name variation /document Note: It is best practice to ensure employer entered in originations matches employer name as stated on payslips

Name variation acceptable with use of authority
Scenario / example	Requirements to be acceptable under policy
Borrower / guarantors name differs E.g. Just the surname listed Verification document shows Khoury Correct name is Nour Khoury E.g. Nicknames Verification document shows Ironman Smith Correct name is Simon Smith E.g. Adopted names / anglicised name where the applicant's legal name is different to adopted name (and no other supporting document held such as pay credits to an account in the correct name) Verification document shows John Wang Correct name is Zhang Wang	Appropriate authority e.g. OVA to accept the verification document held, and A comment is added to the loan origination system justifying acceptance of the document

Name variation not acceptable
Scenario / example	Requirements to be acceptable under policy
E.g. Birth or former name used where marriage certificate not held linking to name in loan application Verification document shows Joan Single Marriage certificate not held showing Single to Married Correct name is Joan Married	Do not proceed with loan application until further enquiries are made. E.g. Borrower / guarantor to supply marriage certificate held showing Single to Married
E.g. Name change where name change certificate not held Verification document shows Clint East Name change certificate not held showing Clint East to John West Correct name is John West	Do not proceed with loan application until further enquiries are made. E.g. Borrower / guarantor to supply Name change certificate held showing name change
E.g.. Alias, i.e. a false name used to conceal an identity Verification document shows Alfred Jones Correct name is John Smith	Do not proceed with loan application

New wording
The names of borrowers and guarantors must be correct in the loan origination system.
Where a verification document(s) shows a name mismatch to the loan origination system, policy allows minor name variations to be accepted without referring to Credit or applying an override.

The tables below list a number of acceptable name variation scenarios / examples and are intended as a guide only, i.e. they should not be taken as the only allowable scenarios / examples.

Category 1: Minor name discrepancies
Where verification document is used for Income and/or Commitments.

Scenario	Verification document shows:	Legal Name	Requirements to be acceptable under policy
Full name not shown	Jane Doe	Jane Anne Doe	No further action required The name variation is minor and can be accepted without obtaining a further verification document or entering a comment in the loan origination system
Middle name shown as an initial	Jane A. Doe	Jane Anne Doe
Hyphen is either: not shown; or shown	Jane-Anne Doe	Jane Anne Doe
Hyphen is either: not shown; or shown	Yiling Wang	Yi-Ling Wang
Name split is not shown correctly	Ching Yu Chan	Chingyu Chan
Name split is not shown correctly	Yiling Wang	Yi Ling Wang
Shortened or common name	Bob Brown	Robert Brown
Names listed out of order e.g. surname listed first	Kumar, Dhruv	Dhruv Kumar

Category 2: Customer has formally changed their name

Scenario

Verification document shows:

Legal name

Requirements to be acceptable under policy

Name change

Clint East

John West

Further enquiries are to be made.

The verification document is acceptable where:

The name on the verification document can be linked to the legal name of the borrower (or guarantor) via Change of Name certificate;

AND

The certificate is uploaded to OBP

Married, birth or former name used

Joan Single

Joan Married

Further enquiries are to be made.

The verification document is acceptable where:

The name on the verification document can be linked to the legal name of the borrower (or guarantor) via a copy of marriage certificate or birth certificate;

AND

The certificate is uploaded to OBP

Category 3: Employer Name

Scenario	Income verification document shows:	Legal name	Requirements to be acceptable under policy
Employer name shortened or abbreviated variation	Westpac or WBC	Westpac Banking Corporation	No further action required The name variation is minor and can be accepted without obtaining a further verification document or entering a comment in the loan origination system.
Employer name shortened or abbreviated variation	ABCD or ABCD Pty Ltd	ABCD Propriety Limited
Missing Propriety Limited or Pty Ltd	George Cleaning	George Cleaning Services Pty Ltd
Other name shortenings	Cleaning Aust.	Cleaning Australia
Employer / supplier differs E.g. business or trading name of the controlling company	BankSA	Westpac Banking Corporation	The verification document is acceptable where: The legal name can be verified via an alternate document or source, e.g. ABN search OR A comment is added to the loan origination system justifying the acceptance of the name variation / document Note: If an additional supporting document is obtained it must be uploaded to OBP.

Category 4: Other name discrepancy examples

Where verification document is used for Income and/or Commitments. Name Variance	Verification document shows:	Legal name	Requirements to be acceptable under policy
Use of initial and surname	J. Doe	Jane Anne Doe	The verification document is acceptable where: The name on the verification document can be linked to the legal name of the borrower (or guarantor) via an alternate source or another acceptable document. E.g. the amount on the payslip is credited to an account in their legal name (verified to internal system extract or enquiry or account statement) AND A comment is entered in the loan origination system justifying acceptance of the name variation / document Note: If an additional supporting document is obtained it must be uploaded to OBP.
Use of a middle name instead of first name	Anne Smith	Mary Anne Smith
Surname only listed	Khoury	Nour Khoury
Nickname used	Ironman Smith	Simon Smith
Adopted or anglicised name where differs to legal name	John Wang	Zhang Wang

Unacceptable Name Variations

Verification document	Legal name	Issue	Requirements to be acceptable under policy
Alfred Jones	John Smith	False name used to conceal an identity	Do not proceed with loan application

Change 3
Update to document type – Account statement
Old wording

Account Statement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document Must Display	Issuer name or logo Account holder/s name matching the applicant BSB and account number ³ or account identifier ³ The period over which the information applies Any credit and or debit transaction displayed must also include Date Amount Narrative (not required for foreign statements) Current or closing balance
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Private Wealth High Net Worth

New wording

Account Statement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the account is open / active	2 months
Maximum Age at Responsible Lending start date	When the account is closed	No maximum age
Document Must Display	In all cases	Issuer name or logo Account holder/s name matching the applicant BSB and account number³ or account identifier³
	When the account is open / active	The period over which the information applies Any credit and or debit transaction displayed must also include: Date Amount Narrative (not required for foreign statements) Current or closing balance
	When the account is closed	Date Narrative must confirm account is closed
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Private Wealth High Net Worth

Change 4
Update to document type – Account Summary / Extract / Overview
Old wording

Account Summary / Extract / Overview If this document meets the 'Document must display' requirements of an 'Account statement', it may be used as an 'Account statement'
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Issuer name, logo, or stamp Account holder/s name matching the applicant ^{1 ,} ³ BSB and account number ¹ or account identifier ^{1 ,} ³ The period over which the information applies Date ⁴ Note: 'The period over which the information applies' can be used to determine the date
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Private Wealth High Net Worth

New wording

Account Summary / Extract / Overview If this document meets the 'Document must display' requirements of an 'Account statement', it may be used as an 'Account statement'
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the account is open / active	2 months
Maximum Age at Responsible Lending start date	When the account is closed	No maximum age
Document must display	In all cases	Issuer name, logo, or stamp Account holder/s name matching the applicant ¹^,³ BSB and account number¹ or account identifier ¹^,³
	When the account is open / active	The period over which the information applies Date⁴ Note: 'The period over which the information applies' can be used to determine the date
	When the account is closed	Date⁴ Narrative must confirm account is closed Note: 'The period over which the information applies' can be used to determine the date
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Private Wealth High Net Worth

Change 5
Update to document type – Account Transaction listing
Old wording

Account Transaction listing If this document meets the 'Document must display' requirements of an 'Account statement', it may be used as an 'Account statement'
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Issuer name, logo, or stamp (not required for Internal ² Accounts) Account holder/s name matching the applicant ¹ (not required for Internal ² Accounts) BSB and account number ^{1 ,} ³ or account identifier ^{1 ,} ³ (For internal ² accounts, the number must be matched to the applicant) The period over which the information applies Any credit and / or debit transaction displayed must also include: date amount narrative
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Private Wealth High Net Worth

New wording

Account Transaction listing If this document meets the 'Document must display' requirements of an 'Account statement', it may be used as an 'Account statement'
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the account is open / active	2 months
Maximum Age at Responsible Lending start date	When the account is closed	No maximum age
Document must display	In all cases	Issuer name, logo, or stamp (not required for Internal ² Accounts) Account holder/s name matching the applicant ¹ (not required for Internal ² Accounts) BSB and account number ¹^,³ or account identifier ¹^,³ (For internal ² accounts, the number must be matched to the applicant)
	When the account is open / active	The period over which the information applies Any credit and / or debit transaction displayed must also include: date amount narrative
	When the account is closed	Date⁴ Narrative must confirm account is closed Note: 'The period over which the information applies' can be used to determine the date
Used for	Verifying Income Commitments Genuine Savings, Equity and Customer Contribution Maximum Loan Term and Exit (Repayment) Strategy Lending to Non-Australian Citizens Special Packages – Private Wealth High Net Worth

Change 6
Update to document type – Credit provider’s letter
Old wording

Credit provider's letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Account holders name matching the applicant ¹ Account number ¹^{, 3} or account identifier ¹^{, 3} Issuer name Issuer ABN or ACLN Date
Used for	Commitments

New wording

Credit provider's letter
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	When the facility / account is open / active	2 months
Maximum Age at Responsible Lending start date	When the facility / account is closed	No maximum age
Document must display	In all cases	Account holders name matching the applicant ¹ Account number ¹^,³ or account identifier ¹^,³ Issuer name Issuer ABN or ACLN Date
Document must display	When the facility / account is closed	Commentary confirming the facility / account is closed
Used for	Commitments

Change 7
Update to document type – Credit provider’s email advice
Old wording

Credit provider's email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	2 months
Document must display	Account holders name matching the applicant ¹ Account number ¹^{, 3} or account identifier ¹^{, 3} Issued from the provider's firm email system (not a public email address e.g. gmail). Date ⁵
Used for	Commitments

New wording

Credit provider's email advice
Acceptable Document Format	Written text within the body of an email
Acceptable Supplier	Issuer
Maximum Age at Responsible Lending start date	When the facility / account is open / active	2 months
Maximum Age at Responsible Lending start date	When the facility / account is closed	No maximum age
Document must display	In all cases	Account holders name matching the applicant ¹ Account number ¹^,³ or account identifier ¹^,³ Issued from the provider's firm email system (not a public email address e.g. gmail). Date ⁵
Document must display	When the facility / account is closed	Commentary confirming the facility / account is closed
Used for	Commitments

Change 8
Update to document type – Rental / lease agreement
Old wording

Rental / lease agreement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current document to a maximum of 12 months
Document must display	In all cases	Rental property address Signed by tenant and landlord Rental amount per cycle Date
	When used for Commitments	Tenant name matching applicant
Used for	Verifying Income Commitments

New wording

Rental / lease agreement
Acceptable Document Format	Standalone document
Acceptable Supplier	Issuer or customer
Maximum Age at Responsible Lending start date	Current document to a maximum of 12 months where used in isolation. Note: where the document exceeds age of document requirements, it can be used in combination with another supporting document (e.g. transaction listing evidencing the rental deposits to an account, that can be linked to the rental / lease agreement), refer to Using a combination of documents to complete verification
Document must display	In all cases	Rental property address Signed by tenant and landlord Rental amount per cycle Date
Document must display	When used for Commitments	Tenant name matching applicant
Used for	Verifying Income Commitments

19 February 2023

Minor typo correction

26 March 2023

Change 1
Updated section 2.8 Minimum Document Standards Table > Payslips and Employer letter – for general use, to clarify that an employer ABN is not required on documents issued from:

Australian Government body / departments, refer Glossary, and
Foreign employers who are not registered in Australia

Change 2
Deleted below document type ‘Salary Sacrifice Declaration Form’ and references to the form (form replaced by OBP functionality):

Salary sacrifice declaration
Acceptable Document Format	Standalone document
Acceptable Supplier	Customer
Maximum Age at Responsible Lending start date	2 months
Document must display	Signed by the applicant making the declaration Name of the individual making the declaration matching the applicant Employer name matching the loan application All fields related to the type of salary sacrifice have been completed Amounts declared are supported by the deduction shown on the pay document Date
Used for	Verifying Income

Change 3
Updated section ‘Name Variations > Category 3: Employer name to include the below. Clarification change only, to move the rule from the ‘Verifying Income’ chapter to this chapter.
Scenario: Employer name missing
Income verification document shows: No employer name
Legal name: Westpac Banking Corporation
Requirements to be acceptable under policy:
The verification document is acceptable where:

The legal name can be verified via an ABN search

Change 4
Updated maximum age for ‘Payslip’. Clarification change only, to move the rule from the ‘Verifying Income’ chapter to this chapter.
Changed from
2 months. Pay date or end of payment cycle (whichever is most recent) can be used as the age of the payslip
Changed to:
When used for verifying Income:
Pay date or end of payment cycle (whichever is most recent) can be used as the age of the payslip

2 months, or
4 months when:
- supported by current account statement or account transaction listing or account summary / extract / overview:
  - meeting the minimum standards for that document, and
  - evidencing:
    - source is consistent with payslip. Employer is the same, and
    - frequency of deposit is consistent with pay cycle, and
    - amount credited to account is equal to or greater than net amount shown on payslip (where amount credited is greater, the amount shown on payslip applies)

When used for other purposes:
Maximum age: 2 months. Pay date or end of payment cycle (whichever is most recent) can be used as the age of the payslip

24 April 2023

Australian Taxation Office Notice of Assessment (ATO NOA)
Used for section – added:

Serviceability Assessment > Apportioned household expenses and shared commitments - Spousal same household

21 May 2023

Throughout document, redirected references and links from ‘Validation of information provided by the customer’ policy chapter to ‘Loan Application and Approval > Validation of information provided by the customer’. Housekeeping change only

2 July 2023

Update to:

Credit Providers letter
Credit Provider email

Expanded to show:
When facility / account is closed; Commentary confirming facility / account is cancelled or closed

20 August 2023

Change 1
Add:

Westpac Property Report

Change 2

Updated section 2.4 to add a link to the Minimum Document Standards Table
Updated section 2.8 Minimum Document Standards Table to include the following note:

Note: Where a supporting document being used to complete a verification activity, as required in Verifying Income or Commitments, does not contain all the mandatory information to be displayed on the document on its own, according to the verification activity, refer Using a combination of documents to complete verification

Change 3
Updated ‘Minimum Document Standards Table > Payslip’ to include maximum age ‘12 months when used to verify Bonus Income’

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03.09 Eligibility

Policy ID

03.09

Policy Name

Eligibility

Policy Content

About this policy
1.1 Definition of a borrower
1.2 What is the loan purpose?
1.2.1 Why this policy
2. Rules you must apply
2.1 Identifying the borrower
2.2 Eligible Borrowers for a Consumer Mortgage Loan
2.3 Australian Citizen residency status
2.4 Customers Experiencing Vulnerability
2.5 Co-borrower eligibility requirements
2.5.1 Banking Code of Practice (BCoP)
2.5.2 Substantial benefit test
2.5.3 Co-borrowing where substantial benefit test has not been met
2.6 Loan Purpose
2.7 Suitability Assessment under Responsible Lending
2.8 Employment and residential stability
2.9 Applications outside policy
3. Process to follow
3.1 Identifying a business banking client - WBC

1. About this policy

1.1 Definition of a borrower

Borrowers / applicants are individual / natural person(s) and non-natural entities that are eligible to access the suite of Residential Lending Products (consumer mortgage products) assessed under Consumer Lending Policies.

1.2 What is the loan purpose?

The loan purpose indicates the reason why a borrower is applying for a loan. The purpose of the loan is used to make a decision on the borrower’s suitability, eligibility, the risk associated with the transaction as well as setting the appropriate pricing for the loan.
Note loan purpose and borrower type also determines whether the National Credit Code (NCC) applies.

1.2.1 Why this policy

The purpose of this policy is to provide an overview of:

The acceptable borrowers for Consumer Mortgage loans
The acceptable loan purposes for Consumer Mortgage loans
Co-Borrowers eligibility requirements for Consumer Mortgage loans

Loans may be made available to existing customers or non-customers provided they can meet Bank eligibility criteria and the loan is deemed not unsuitable. Applicants need to demonstrate:

The legal capacity to enter into a Credit Contract. (Bank policy requires that the minimum age of an applicant must be 18 years).
A satisfactory financial position for age/income with the ability to meet all existing and proposed commitments in accordance with the Bank's debt servicing criteria without enduring financial hardship.
- - It is contrary to credit policy to add a borrower to any loan facility to increase servicing / borrowing power.
  - Furthermore, guarantor income may not be added to borrower income when assessing servicing capacity, except where permitted under Guarantees policy.
If they are a co-borrower, that they are receiving a substantial benefit from the loan transaction - refer Co-borrower eligibility requirements.

A satisfactory credit history.
Stability in employment with a regular, predictable and verifiable income source.
Stable residency or mobility through employment (e.g. teacher, police officer etc.)
They are not aware of any significant changes to their financial situation over the next 3 years that would adversely impact their ability to meet loan repayments. If a customer indicates that they are aware of adverse changes that may impact their ability to make repayments the loan must be referred to the Credit Team with details of the change, the expected impact, and any mitigating circumstances that Credit should consider when reviewing the application.

You may also need to refer to other lending policy rules, including but not limited to:

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

2. Rules you must apply

2.1 Identifying the borrower

All borrowers/applicants must be identified before any loan application is processed. Under no circumstances can an account be opened (including any loan account) without the required identification.
You must confirm the applicant’s residency status as specific policy rules may apply to your individual applicant. For further information refer Australian citizen residency status and Lending to Non-Australian Citizens .
Where the applicant is an existing WBC / SGB / BoM / BSA customer and has an existing Relationship Manager, the application must be referred to the Relationship Manager for assessment. Refer to Eligibility > Process to follow > Identifying a business banking client .

2.2 Eligible Borrowers for a Consumer Mortgage Loan

The following Borrower types are eligible to receive Consumer Mortgage Loans.
Eligibility is assessed at the time the Borrower is applying for the loan.
Borrowers not described in this section are unacceptable to receive consumer lending products.
Refer to individual Product Policies for any additional Product specific restrictions and eligibility criteria.

Borrower type	Description	Eligibility criteria
Individual	Means any of the following: Natural person Sole traders or self-employed (including contractors) The minimum age for an individual applicant is 18 years.	Individual borrower / trustee must be an: Australian citizen, refer to Australian citizen residency status , or Acceptable Permanent or Temporary Visa holder, refer to Lending to Non-Australian Citizens policy Where there is more than one borrower, also refer Co-borrower eligibility requirements
Trust - Individual / natural person trustees	An Individual acting in their capacity as trustee for a trust seeking to borrow on behalf of the trust	Refer to your Business Development Manager
Partnership	Means any unregulated partnership of individuals or corporate entities.	Partnership borrowers (either individual or corporate) are only available via Business Banking and Private Wealth channels
Trust - non-individual / non-natural trustees	An entity acting in its capacity as trustee for a trust seeking to borrow on behalf of the trust	Refer to your Business Development Manager
Company (acting a borrower)	Means any of the following: Domestic proprietary company (holding an ACN) Other incorporated company (holding an ACN)	Refer to your Business Development Manager
Incorporated bodies	Means clubs and associations	The Bank will not lend to Bodies Corporate without approval of Group Credit Note: It would not be prudential to lend to these bodies due to their nature. Independent individuals brought together within a strata complex with no income source do not provide a satisfactory borrowing entity

2.3 Australian citizen residency status

Where an Australian citizen is an eligible borrower for a consumer mortgage, refer to the below table for any additional requirements, based on residency status:

Applicant type	Ordinarily resident	Income	Additional policy rules
Australian citizen ¹	In Australia	AUD	No additional requirements, assessed in terms of standard policy
	In Australia	Foreign (PAYG only) ²	Mortgage Insurance is not available Owner builder is unavailable (all other products acceptable)
	Out of Australia ³	AUD	Where the: Passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country. Applicant(s) is earning income in China, all of the following additional documents are required: Z Visa, which is only a vehicle to enter China for a limited period of time. Upon arrival, the Z visa holder must then obtain work and residence permits which will allow them to legally work in the country Work Permit (Alien Employment License) Resident permit
	Out of Australia ³	Foreign (PAYG only) ²	Same as Ordinarily resident Out of Australia > AUD Income Additionally: Mortgage Insurance is not available Owner builder is not available (all other products acceptable)
Legend item	Additional conditions
1	Evidence of Australian citizenship may be any one of: A copy of an Australian Birth Certificate / Extract A copy of a current Australian Passport A copy of an Australian Citizenship Certificate
2	Australian citizens earning foreign income, regardless of residency (i.e. in or out of Australia), are subject to a lower maximum LVR, refer Loan to Value Ratio (LVR) > LVR by borrower type and income source
3	If the security is for owner occupation by spouse or family member but an applicant lives out of Australia, then the following details must be included in the loan application: Overseas rental outgo, or Property asset relating to overseas residence (if owned / purchasing) And Any associated overseas mortgage repayments and liabilities, where applicable.

2.4 Customers Experiencing Vulnerability

When interviewing a customer or processing a consumer mortgage loan application, you must take extra care:

If you notice a vulnerability
if a vulnerability is disclosed to your

Customer vulnerability refers to customers in circumstances which make them more susceptible to harm, loss, or disadvantage (either personal or financial) than a person not in those circumstances. This means that they may require extra care to help them achieve a similar service outcome to someone who is not in vulnerable circumstances.

Vulnerable customers include those experiencing:
A. Age-related impairment.
B. Cognitive impairment.
C. Elder abuse.
D. Family or domestic violence.
E. Financial abuse.
F. Mental illness or mental health problems.
G. Serious illness and severe or long-term illness.
H. Gambling
I. Scams
J. any other identifiable personal, or financial, circumstance causing significant detriment

There are many types of vulnerability and learning a catalogue of circumstances may not always be helpful. Be alert to recognise the potential signs of someone experiencing vulnerable circumstances and use the extra care mindset:

Act with Sensitivity
Act with Compassion
Act with Respect

It is with that extra care mindset, that Brokers are to ensure all borrowers and guarantors fully understand the commitment they are entering into.

Vulnerability category	Loan processing guidance
A. Age-related impairment.	Only proceed with the loan application provided there are no other vulnerable categories evident that would prevent the loan from proceeding. Ensure all other policy parameters are met, e.g. Maximum Loan Term and Exit (Repayment) Strategy.
B. Cognitive impairment. Cognitive impairment is not an illness, but a description of someone's condition. It means they may have trouble with things like memory, paying attention or have trouble speaking or understanding. Having difficulty recognising people, places or things. They may find new things or situations overwhelming. For the Bank’s process purposes, cognitive impairment will include customers with an intellectual disability,	Where the cognitive impairment is serious (i.e. where the customer does not have legal capacity), do not proceed with the loan application unless a Court appointed guardian, administrator or an enduring Power of Attorney (appointed prior to the loss of capacity), is present. For any other minor or temporary impairment, ensure a suitable support person, such as a family member nominated by the customer (who is not a staff member of the Westpac Group), is present. Note: A suitable support person cannot be a co-borrower or a person who would be set to receive any benefit under the loan facility. Only proceed with the loan application provided there are no other vulnerable categories evident that would prevent the loan from proceeding. Referral to credit is mandatory to ensure all borrowers will receive an adequate direct benefit and to ensure the loan is documented correctly. Note: There are only very limited circumstances that a loan application should proceed where a borrower is suffering from cognitive impairment. Extreme care should be taken to ensure the loan is for the borrower’s benefit e.g. bridging loan to assist with move to nursing care until sale of owner-occupied home.
C. Elder abuse.	If the borrower or guarantor appear to be under coercion, including because of their vulnerable circumstances, the loan application should not proceed.
D. Family or domestic violence.	If the borrower or guarantor appear to be under coercion, including because of their vulnerable circumstances, the loan application should not proceed.
E. Financial abuse.	If the borrower or guarantor appear to be under coercion, including because of their vulnerable circumstances, the loan application should not proceed.
F. Mental illness or mental health problems. For the Bank’s process purposes mental illness or mental health problems will include customers with depression or anxiety.	Ensure all borrowers / guarantors understand the loan and are not under any coercion. If the borrower or guarantor appear to be under coercion, including because of their vulnerable circumstances, the loan application should not proceed. Note: There are only very limited circumstances that a loan application should proceed where a borrower is suffering from mental illness or mental health problems. Extreme care should be taken to ensure the loan is for the borrower’s benefit.
G. Serious illness and severe or long-term illness.	Only proceed with the loan application provided there are no other vulnerable categories evident that would prevent the loan from proceeding. Note: There are only very limited circumstances that a loan application should proceed where a borrower is suffering from serious illness or long term illness. Extreme care should be taken to ensure the loan is for the borrower’s benefit. Ensure the income used to service the loan is sustainable and that the loan term is suitable. Also ensure the any expected significant changes to financial circumstances have been adequately addressed.
H. Gambling	There are only very limited circumstances that a loan application should proceed where a borrower is suffering from a gambling addiction. Extreme care should be taken to ensure The loan requested is not for further gambling Any co-borrower will receive a substantial benefit Any guarantor has sought independent legal advice and has been provided with the required documents outlined in Guarantees>Accepting a guarantee – 3 day requirement The gambling has been loaded as an expense and included within the loan serviceability assessment.
I. Scams	If it is evident that the borrower is being scammed and the loan being applied for relates to the scam, the application should not proceed.
J. Any other personal, or financial, circumstance causing significant detriment	Only proceed with the loan application provided there are no vulnerable categories evident that would prevent the loan from proceeding.

When to take application notes:

The needs of a vulnerable customer must be considered prior to submitting an application. Unless it’s directly related to the Suitability Assessment under Responsible Lending obligation, Brokers must not make records about a customer’s potential or actual vulnerability as this may be a breach of the customers privacy.

If the customer's vulnerability impacts the Suitability Assessment under Responsible Lending obligation, Brokers must enter notes in ApplyOnline to provide a justification for the loan to proceed under Responsible Lending laws, regardless of whether the customer provides explicit consent. Similarly, you do not need to request consent to record notes when the information directly relates to the applicant(s)’ financial ability to service the new loan application.

Notes on vulnerability for the Suitability Assessment must:

Be factual only
Not express an opinion or be defamatory
Limit information to what is absolutely necessary to satisfy the Suitability Assessment Responsible Lending obligation.

Where a customer requests the vulnerability information not be recorded and this is directly relevant to the Suitability Assessment or their financial ability to service the loan, the application must not commence.

Should a customer tell you they are in vulnerable circumstances and need assistance, please contact the Broker Hotline to advise that the customer is in a vulnerable circumstance and requires extra care, so that extra care can be provided.

2.5 Co-borrower eligibility requirements

2.5.1 Banking Code of Practice (BCoP)

In compliance with the Banking Code of Practice (BCoP), we will not approve an individual as a co-borrower on a loan unless they will receive a substantial benefit from that loan.

A loan should not be structured as a co-borrower loan where the customer is better suited to be a guarantor simply to enable processing.
Where it appears that a co-borrower is experiencing financial abuse, the application must not be submitted for assessment as a co-borrower loan.

Also refer to ‘Customers Experiencing Vulnerability'

2.5.2 Substantial benefit test

A substantial benefit requires that each co-borrower must get a real and tangible benefit arising out of the underlying transaction. That is, where there are 2 or more co-borrowers:

Each co-borrower has a direct legal or equitable ownership interest of at least 30%^* in the asset (i.e. property) being purchased with the loan funds, or
At least 30%^* of the loan funds will be used to repay or refinance debts or other obligations in each co-borrower’s name.

^*If there are more than two co-borrowers, or the co-borrowers have different levels of ownership, then the percentage figure may be reasonably adjusted. For example, 4 co-borrowers could be 25% each. If the minimum percentage is not met, consider whether the applicant who is not receiving a substantial benefit from the loan is better protected under a guarantor structure.

In meeting the banks R&O requirements to determine a borrowers Substantial Benefit, brokers must:

Enquire of the borrowers how the loan funds will be used and ensure the percentage of loan funds used meets the policy minimum: and
Record in the loan origination system, details of the customer’s response and the reasons why both borrowers will receive a substantial benefit.

The substantial benefit requirement is to be satisfied on the information the customer has provided us during the loan application.

In addition, further clarification must be sought from the customer if the information they provide conflicts with any other information disclosed in the application.

Scenarios where substantial benefit is met
Sample lending scenario	Explanation
Co-borrowers are purchasing a new property, which they will own as joint tenants¹	As joint tenants, they each have an equal share in the property and the substantial benefit test is met.(e.g satisfies the requirement that each borrower must have at least 30% ownership in the security property being purchased)
Co-borrowers are purchasing a new property, which they will own as tenants in common² in a 60%/40% share.	Substantial benefit test is met as each co-borrower will own at least 30% share in the property.
Co-borrowers apply to refinance their existing home loan [currently with another bank] which is in both names.	Substantial benefit test is met as the loan funds will be used to repay the existing joint debt.
Co-borrowers have an existing home loan with us, and they apply to access some of the equity in their property (i.e. cash out)	Ask the customers what they wish to use the funds for. Even if there are multiple purposes, apply the substantial benefit test to the total value of the transaction. If at least 30% of the funds will be used for the benefit of both co-borrowers, i.e. to refurbish the security property or to purchase a car they will both have access to, then the substantial benefit test is met. If the funds are to be used to purchase shares to be held in one co-borrower’s name only, then substantial benefit test is not met. However, an exception below may apply.
Co-borrowers have applied for a loan for $600,000. Loan funds to be used for multiple purposes: To purchase an investment property for $500,000 and To pay out a personal loan in one co-borrowers name of $100,000	Ownership in the property being purchased will be 60% to one borrower and 40% to the other co-borrower One co-borrower has the benefit of $200,000 interest in the investment property (which is 33.33% of the requested loan amount). The other co-borrower has the benefit of $400,000 ($300,000 interest in the investment property + $100,000 to pay out personal loan which is 66.66% of the requested loan amount). Note: Both co-borrowers must have a benefit of at least 30% of the $600,000 loan, for the substantial benefit test to be met.
Co-borrowers have an existing home loan with us, and they apply for a top up of their home loan to purchase a car for their child.	Substantial benefit test is met because one co-borrower is receiving the same benefit relative to the other’s benefit.
Note 1. ¹Joint tenants both have equal ownership of and interest in the property. In the event that one joint tenant dies, their interest in the property passes to the surviving joint tenant. ² Tenants in common each own a defined share in a property. They may sell their share in the property to another person if they wish. In the event that one tenant in common dies, their share of the property becomes part of their deceased estate.

Scenarios where substantial benefit not met
Sample lending scenario	Guidance
Co-borrowers are purchasing a new property, which they will own as tenants in common in a 90/10 share	Substantial benefit test is not met. However, an exception below may apply.
A couple are purchasing a property and the title will be registered in one of their names only	Substantial benefit test is not met. However, an exception below may apply.

2.5.3 Co-borrowing where substantial benefit test has not been met

Where the substantial benefit test (refer Substantial benefit test) has not been met for a co-borrower, If the borrowers still wants to proceed the broker must take reasonable steps to ensure that the individual who does not appear to be receiving a substantial benefit:

understands the risks of being a co-borrower on the loan; and
understands the difference between being a co-borrower and a guarantor; and
has received the ‘Fact Sheet: Co-borrower or Guarantor?’; and
provided the reasons why they want to be a co-borrower; and
the broker is satisfied that the individual is not experiencing financial abuse; and
record details of the customer’s response and the reasons why the loan should proceed in the origination system.

Where the above conditions have been satisfied:

Spousal Applications (max 2 borrowers)	Non-Spousal applications
Assessor may progress the application provided they are satisfied with the details provided in the above steps	Assessor must refer the application to the Credit Decisioning team

2.6 Loan Purpose

Loan purpose is identified by assessing the predominant purpose for which more than half of the new loan funds being requested will be used.

The following table outlines the Acceptable and Unacceptable loan purposes. You must also refer to:

individual Product Policies for any additional Product specific restrictions and eligibility criteria
Suitability Assessment under Responsible Lending

Acceptable loan purposes After considering the predominant loan purpose, the below are considered acceptable use of funds for consumer mortgage products. This includes: Applications for new loans and increases to an existing loan. Refer to Suitability Assessment under Responsible Lending for further information about recording loan purpose.
Loan purpose	Description
Bridging loan	Short-term finance for the purchase of a residential property for the borrower’s own occupancy prior to an existing property being sold.
Business Whether provided to an individual or non-individual, if the predominate purpose is Business (i.e. >50% of the loan is used for business purpose), the application is to be referred to Business Bank (or an equivalent division) and a suitable business product provided.	The financing of assets used or activities performed in the ongoing production and/or sale of goods and services for profit. This includes all of the following: Purchase of non-residential property to be used by the borrower or borrower group to operate a business from (including farming, forestry etc) Development of non-residential property as a primary source of income (e.g. property development business) Purchase of a new or existing business (e.g. trading, manufacturing, services, retail etc.) Purchase of goods or services (including equipment, fixtures and fittings, renovations etc) for use in or by a business Investment in a business by buying shares or units where the borrower or borrower group predominantly owns or controls the business Working capital for a business including all business operating expenses (e.g. wages, electricity, stock, trade creditors etc) Refinance of existing business loans where the purpose is assessed as 'business purpose' under this policy Payments of tax debts, or other regulatory obligations, of a company or of individuals arising in relation to their business (i.e. non PAYG tax debts).
Cash out	Cash out is where existing funds are fully or partly released directly to the customer for an acceptable purpose as listed in this table. Individual policy restrictions may apply regarding cash out, for further information refer to: Glossary > definition > Cash out Guarantees > Family – Security Guarantee > Loan purpose Loan to value ratio (LVR) : LVR by borrower type and income source LVR by product features and purpose > Cash out Acceptable Security Collateral > Security under the National Rental Affordability Scheme (NRAS) > NRAS type > All NRAS (new purchase, loan increase or refinance) Construction Loans : Progress payments
Construction / renovation / home improvements	The construction of a residential dwelling to be erected by a licensed contract builder (owner occupied or investment) or owner builder (owner occupied) for residential usage. This includes structural and non-structural renovations or alterations to existing residential dwellings. For further information refer to Construction Loans policy
Debt consolidation / refinance	The refinance of one or more of the following: Non-property consumer loans (personal purposes). Owner Occupied or Investment loans originally for business purpose where the business purpose is no longer applicable (e.g. loan used to purchase a business, but the business is no longer trading.) Any other debt listed as acceptable in this policy
Loan increase	Increase or top-up of an existing loan for an acceptable purpose as listed in this policy, including improvements, renovations or additions to an existing dwelling) E.g. a loan increase for predominantly Business purposes is not acceptable.
Investment property	The purchase or refinance of a new or existing Completed residential dwelling which will be for investment (non-owner occupied). Note: Where a loan is being refinanced the loan purpose at the time of refinance must satisfy this definition. Refer Acceptable Security Collateral policy
Other investments e.g. purchase of shares or other non-property investment	This includes all of the following – Purchase of financial investments where there is an expectation of a return being paid or appreciation in value (e.g. shares in listed or unlisted companies, units in a listed or unlisted trust, managed funds, options, derivatives etc). Note: Investments in entities where the borrower or borrower group predominantly owns or controls the entity is considered ‘Business purpose’ (refer above). Purchase of all other investments that the customer intends on retaining where there is an expectation of a return being paid or appreciation in value (e.g. art, antiques, wine etc).
Owner Occupied property	The purchase or refinance of a new of existing Completed residential dwelling which will be owner occupied. Note: Where a loan is being refinanced the loan purpose at the time of refinance must satisfy this definition. Refer Acceptable Security Collateral policy
Personal¹	This includes all of the following: The purchase of goods and services for personal, domestic or household purposes (e.g. education expenses, household furniture, holidays etc). Providing financial assistance or loans to a Director, Shareholder or Partner to repay a loan made to them by a company or partnership. Providing financial assistance or loans to family or friends that will be re-paid.
Vacant land	The purchase or refinance of residential vacant land for future owner occupied or investment purposes. Note: Where a loan is being refinanced the loan purpose at the time of refinance must satisfy this definition. Refer Acceptable Security Collateral policy
Legend: ¹ Repayment of: Tax Debts or Tax Bills is only acceptable where the loan is non-mortgage insured and Credit have approved as a Bank policy exception Margin Loan is not acceptable as often the facility is linked to the value of a share portfolio which Consumer Banking does not monitor. Customers should contact their lender to arrange for the Margin Loan to be closed. Novated Lease is not acceptable due to issues and complexities that come with trying to close or reduce these facilities. Family / Private loans are not acceptable where LMI is required or for a Partial Reduction Partial repayment and limit reduction of St George, Bank of Melbourne and Bank SA Portfolio loan facilities are not acceptable, due to issues and complexities that come with reducing these facilities

Unacceptable Loan Purpose

Unacceptable loan purposes for Consumer mortgage products are:

Purposes that are illegal
Gambling
Meet repayments on existing commitments¹
Any purpose which poses a reputation risk to the group
Portability/Substitution with new lending (i.e. portability/substitution with simultaneous settlement)
Predominantly Business purpose. These loans must be referred to Business Bank and a suitable business product provided.

Legend:
¹ Repayment of Tax Debts or Tax Bills is only acceptable where the loan is non-mortgage insured and Credit have approved as a Bank policy exception

2.7 Suitability Assessment under Responsible Lending

Residential lending products can be used for any worthwhile and legal purpose where the loan is considered to be not unsuitable for the customer. It is the Broker’s responsibility to make reasonable inquiries with the customer regarding the loan purpose, i.e. what will the funds be used for.

Identifying and recording the use of funds
As part of completing the suitability assessment for Responsible Lending requirements, brokers are to:

Identify and record in the origination platform the purpose(s) and amount of all loan funds, including any requested cash out(s). It is not a requirement to capture a detailed breakdown of each individual cash out.

The applicant(s) do not need to provide further supporting documentation for acceptable cash-out purposes, refer to Loan purpose > Acceptable loan purposes table:

Business
Cash out

Examples of recording the use of cash out, i.e. for:

Renovations totalling $80,000
A family holiday $25,000
A total amount of$45,000:
- $30,000 for furniture
- $15,000 for a family holiday
Investment in shares $100,000
A total amount of $100,000:
- $60,000 for investment in shares
- $40,000 for renovations

Other requirements
Where there are two or more co-borrowers, the Substantial benefit test must be met .

Brokers must:

Make reasonable inquiries regarding the customer’s current and future financial situation to the extent relevant to the customer’s ability to meet their financial obligations under the loan.
Verify the customer’s financial situation to the extent relevant to the customer’s ability to meet their financial obligations under the lending product (see income verification policy).
Make an assessment as to whether the lending product is not unsuitable for the customer.
Ensure that the Lending Policy requirements are met
Ensure if the lending product will be regulated under the National Credit Code.

Note:
For specific requirements and restrictions for each lending product, refer to the individual Product Policies.

2.8 Employment and residential stability

Short numerous periods of employment with differing employers/occupations may be an indicator of undependable or unreliable income

Brokers should review an applicant’s recent employment and residential history and where frequent employment and/or residential changes are evident, seek a satisfactory explanation from the applicant(s) and include the explanation in the . application assessment notes.

Additional requirements for individual employment by income types are detailed in Verifying Income policy.

Note: Applicants currently serving probationary periods are acceptable subject to employment history and stability being demonstrated as detailed above

2.9 Applications outside policy

Where criteria is not met (i.e. security, term, serviceability etc.), and the Broker considers mitigating circumstances warrant favourable consideration, then the application is to be referred to the appropriate Credit Team.
The application is to include appropriate details of all the mitigating facts supporting the recommendation for approval.

3. Process to follow

3.1 Identifying a business banking client - Westpac

For all borrowers, existing Business lending (in personal, guarantor or company names) must be identified prior to a Consumer Loan application being processed.
If any Business lending is identified, the application must be referred to the Relationship Manager or where the borrower does not have a Relationship Manager, State Credit approval is to be obtained, except in the following circumstance:

A Consumer loan may proceed only where the Applicant’s total business lending does not exceed $100k and they have the following facility types only:

Westpac Equipment Finance (WEF), and/or
Business/Corporate Card, and/or
Bank Guarantee (secured by cash/IBD) products

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

8 November 2021

Links updated

21 November 2021

Minor wording update to Identifying Business Banking client (WBC) policy and process

20 February 2022

Section ‘2.6 Suitability assessment under Responsible Lending’ updated to:

clarify that it is not a requirement to capture a detailed itemised breakdown of any cash out
remove requirement to investigate a customer’s level of expertise where seeking to invest in shares or managed funds
remove requirement to investigate customer’s ability to meet additional commitments where the cash out may lead to additional future borrowings, e.g. future property purchase

17 July 2022

Section 2.7 Employment and Residential stability updated:

To remove “Generally three years duration establishes stability”
Wording to:

Short numerous periods of employment with differing employers/occupations may be an indicator of undependable or unreliable income.
Brokers should review an applicant’s recent employment and residential history and where frequent employment and/or residential changes are evident, seek a satisfactory explanation from the applicant(s) and include the explanation in the application assessment notes.

Additional requirements for individual employment by income types are detailed in Verifying Income policy.

Note:
Applicants currently serving probationary periods are acceptable subject to employment history and stability being demonstrated as detailed above.

21 August 2022

Change 1
Section 2.5.1 Acceptable Loan Purpose updated:
To include “Partial repayment and limit reduction of Non-Novated Lease facilities are not acceptable due to issues and complexities that come with reducing these facilities”

2 October 2022

Change 1

Renamed Section 2.2 Eligible Borrowers to 2.2 Eligible Borrowers for a Consumer Mortgage Loan
Renamed Section 2.2.1 Acceptable Borrower types for a Consumer Mortgage Loan to 2.2.1 Australian citizen residency status

Change 2
Table in section 2.2 Eligible Borrowers for a Consumer Mortgage Loan updated to include the following eligibility criteria:

Individual borrower type:

Individual borrower/trustee must be an:
- Australian citizen, refer to Australian citizen residency status, or
- Acceptable Permanent or Temporary Visa holder, refer Lending to Non-Australian Citizens policy
Where there is more than one borrower, also refer Co-borrower eligibility requirements

Partnership borrower type:
- Partnership borrowers (either individual or corporate) are only available via Business Banking and Private Wealth channels.

Change 3
Added subsection 2.2.1 Australian Citizen residency status and moved content from Chapter 3.13 Migrant Lending (Lending to Non-Australian Citizens)

Where an Australian citizen is an eligible borrower for a consumer mortgage, refer to the below table for any additional requirements, based on residency status:

Applicant type	Ordinarily resident	Income	Additional policy rules
Australian citizen ¹	In Australia	AUD	No additional requirements, assessed in terms of standard policy
	In Australia	Foreign (PAYG only) ²	Mortgage Insurance is not available Owner builder is unavailable (all other products acceptable)
	Out of Australia ³	AUD	Where the: Passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country. Applicant(s) is earning income in China, all of the following additional documents are required: Z Visa, which is only a vehicle to enter China for a limited period of time. Upon arrival, the Z visa holder must then obtain work and residence permits which will allow them to legally work in the country Work Permit (Alien Employment License) Resident permit
	Out of Australia ³	Foreign (PAYG only) ²	Same as Ordinarily resident Out of Australia > AUD Income Additionally: Mortgage Insurance is not available Owner builder is not available (all other products acceptable)
Legend item	Additional conditions
1	Evidence of Australian citizenship may be any one of: A copy of an Australian Birth Certificate / Extract A copy of a current Australian Passport A copy of an Australian Citizenship Certificate A copy of a current Medicare Card
2	Australian citizens earning foreign income, regardless of residency (i.e. in or out of Australia), are subject to a lower maximum LVR, refer Loan to Value Ratio (LVR) > LVR by borrower type and income source
3	If the security is for owner occupation by spouse or family member but an applicant lives out of Australia, then the following details must be included in the loan application: Overseas rental outgo, or Property asset relating to overseas residence (if owned / purchasing) And Any associated overseas mortgage repayments and liabilities, where applicable.

Change 4
Impacted section 2.5 Loan Purpose
Added the below new content
The following table outlines the Acceptable and Unacceptable loan purposes. You must also refer to:

individual Product Policies for any additional Product specific restrictions and eligibility criteria
Suitability Assessment under Responsible Lending

Change 5
Deleted below content in section 2.5.1 Acceptable Loan purpose (the information which was contained in the table has been merged with the table in 2.5.3 Definitions - to reduce duplication of information)
2.5.1 Acceptable Loan Purpose

After considering the predominant loan purpose, the below are considered acceptable use of funds for consumer mortgage products. This includes:

All brands: applications for new loans and increases to an existing loan.

Acceptable Loan Purpose

Bridging loan
Cash out (subject to acceptable purposes as defined below)
Construction, renovations or improvements (for further information refer to Construction Loans policy)
Debt consolidation / refinance¹
Loan increases
Investment property
Other investment purposes (e.g. purchase of shares or other non-property investment)
Owner Occupied property
Personal purposes¹
Purchase of a residential property or vacant land (refer to Acceptable Security Collateral policy)
‘Other’ investment purposes (e.g. purchase of shares or other non-property investment)

You must also refer to individual Product Policies for any additional Product specific restrictions and eligibility criteria.

Legend:
¹ Repayment of:

Tax Debts or Tax Bills is only acceptable where the loan is non-mortgage insured and Credit have approved as a Bank policy exception
Margin Loan is not acceptable as often the facility is linked to the value of a share portfolio which Consumer Banking does not monitor. Customers should contact their lender to arrange for the Margin Loan to be closed.
Novated Lease is not acceptable due to issues and complexities that come with trying to close or reduce these facilities.
Partial repayment and limit reduction of Non-Novated Lease facilities are not acceptable due to issues and complexities that come with reducing these facilities
Family / Private loans are not acceptable where LMI is required or for a Partial Reduction
Partial repayment and limit reduction of St George, Bank of Melbourne and Bank SA Portfolio loan facilities are not acceptable, due to issues and complexities that come with reducing these facilities

Change 6
Deleted below content in section 2.5.2 Unacceptable Loan purpose ( the information which was contained in the table has been merged with the table in 2.5.3 Definitions - to reduce duplication of information)
Unacceptable Loan Purpose
Purposes that are illegal
Gambling
Meet repayments on existing commitments 1
Any purpose which poses a reputation risk to the group
Predominantly Business purpose. These loans must be referred to Business Bank and a suitable business product provided.
Legend:
¹ Repayment of Tax Debts or Tax Bills is only acceptable where the loan is non-mortgage insured and Credit have approved as a Bank policy exception

Change 7
Heading ‘2.5.3 Definitions’ has been deleted.
The table outlining the Loan Purpose and Description has been retained. And now appears in the section 2.5 Loan Purpose
Information from 2.5.1 Acceptable Loan Purpose and 2.5.2 Unacceptable loan purpose has been migrated into the section 2.5 Loan purpose .

Change 8
The Loan Purpose type > Cash out > Description column has been updated to provide references to other policy chapters with specific cash out rules.
Old
Cash out is where existing funds are fully or partly released directly to the customer for an acceptable purpose as listed in this policy
New
Cash out is where existing funds are fully or partly released directly to the customer for an acceptable purpose as listed in this table.
Individual policy restrictions may apply regarding cash out, for further information refer to:

Glossary > definition > Cash out
Guarantees > Family – Security Guarantee > Loan purpose
Special Packages – ProLoan Lending policy – WBC Brand only > Residential real estate security collateral – maximum limits > Medico with a predominant loan purpose other than Residential property purchase or construction
Loan to value ratio (LVR):
- LVR by borrower type and income source
- LVR by product features and purpose > Cash out
Acceptable Security Collateral > Security under the National Rental Affordability Scheme (NRAS) > NRAS type > All NRAS (new purchase, loan increase or refinance)
Construction Loans:
- Progress payments
- Progress payments not required

Change 9
Impacted section 2.6 Suitability assessment under responsible lending. Updates have been made to clarify documentation about how the funds are being used is not required. Lenders / assessors need to enquire and record the outcome of customer discussions.
Old
2.6 Suitability Assessment under Responsible Lending

Residential lending products can be used for any worthwhile and legal purpose where the loan is considered to be not unsuitable for the customer. It is the lender’s responsibility to make reasonable inquiries with the customer regarding the loan purpose, i.e. what will the funds be used for.

As part of completing the suitability assessment for Responsible Lending requirements, lenders are to:

Identify and document the purpose(s) and amount of all loan funds, including any requested cash out(s). It is not a requirement to capture a detailed breakdown of each individual cash out e.g. renovations totalling $80,000 is sufficient and an itemised breakdown of the renovation is not required, as per the following cash out example comments:
- Example 1: $80,000 cash out for renovations
- Example 2: $25,000 cash out for a family holiday
- Example 3: $45,000 cash out:
  - $30,000 for furniture
  - $15,000 for a family holiday
- Example 4: $100,000 for investment in shares
- Example 5: $100,000 cash out
  - $60,000 for investment in shares
  - $40,000 for renovations

Notes:

Where there are two or more co-borrowers, the Substantial benefit test must be met. In addition, Construction Loans > Progress payments and Progress payments not required and B usiness purpose policies must also be satisfied for cash out transactions

Make reasonable inquiries regarding the customer’s current and future financial situation to the extent relevant to the customer’s ability to meet their financial obligations under the loan.
Verify the customer’s financial situation to the extent relevant to the customer’s ability to meet their financial obligations under the lending product (see income verification policy).
Make an assessment as to whether the lending product is not unsuitable for the customer.
Ensure that the Lending Policy requirements are met.
Ensure if the lending product will be regulated under the National Credit Code (NCC)

Notes:

For specific requirements and restrictions for each lending product, refer to the individual Product Policies.
For more details regarding Responsible Lending refer to the Responsible Lending intranet site.

New
Residential lending products can be used for any worthwhile and legal purpose where the loan is considered to be not unsuitable for the customer. It is the lender’s responsibility to make reasonable inquiries with the customer regarding the loan purpose, i.e. what will the funds be used for.

Identifying and recording the use of funds
As part of completing the suitability assessment for Responsible Lending requirements, lenders are to:

Identify and record in the origination platform the purpose(s) and amount of all loan funds, including any requested cash out(s). It is not a requirement to capture a detailed breakdown of each individual cash out.

The applicant(s) do not need to provide further supporting documentation for acceptable cash-out purposes, refer to Loan purpose > Acceptable loan purposes table:

Business
Cash out

Examples of recording the use of cash out, i.e. for:

Renovations totalling $80,000.

A family holiday $25,000
A total amount of $45,000:
- $30,000 for furniture
- $15,000 for a family holiday
Investment in shares $100,000
A total amount of $100,000:
- $60,000 for investment in shares
- $40,000 for renovations

Other requirements

Where there are two or more co-borrowers, the Substantial benefit test must be met.
Lenders / Assessors must:

Make reasonable inquiries regarding the customer’s current and future financial situation to the extent relevant to the customer’s ability to meet their financial obligations under the loan.
Verify the customer’s financial situation to the extent relevant to the customer’s ability to meet their financial obligations under the lending product (see income verification policy).
Make an assessment as to whether the lending product is not unsuitable for the customer.
Ensure that the Lending Policy requirements are met.
Ensure if the lending product will be regulated under the National Credit Code (NCC)

Notes:

For specific requirements and restrictions for each lending product, refer to the individual Product Policies.

20 November 2022

Change 1
Updated Loan Purpose section to remove reference to Construction Loans where progress payments not required:
Old wording

Construction Loans :
- Progress payments
- Progress payments not required

New wording

Construction Loans :
- Progress payments

21 May 2023

Change 1

Updated section 2.3 ‘Australian Citizen residency status’ to remove Medicare Card as an acceptable document for verifying Australian citizenship

20 August 2023

Change 1

Updated to 2.5.2 Substantial benefit test policy wording.

Old Wording:

A substantial benefit requires that each co-borrower must get a real and tangible benefit arising out of the underlying transaction. That is, where there are 2 or more co-borrowers:

Each co-borrower has a direct legal or equitable ownership interest of at least 30%^* in the asset (i.e. property) being purchased with the loan funds, or
At least 30%^* of the loan funds will be used to repay or refinance debts or other obligations in each co-borrower’s name.

*If there are more than two co-borrowers, or the co-borrowers have different levels of ownership, then the percentage figure may be reasonably adjusted. For example, 4 co-borrowers could be 25% each. If the minimum percentage is not met, consider whether the applicant who is not receiving a substantial benefit from the loan is better protected under a guarantor structure.

Brokers must enquire of the borrowers how the loan funds will be used and ensure the percentage of loan funds used meets the policy minimum.

Brokers must also record in the loan origination system, details of the customer’s response and the reasons why both borrowers will receive a substantial benefit.

The substantial benefit requirement is to be satisfied on the information the customer has provided us in the course of the loan application. However, further clarification must be sought from the customer if the information they provide conflicts with any other information disclosed in the application.

To understand how the substantial benefit requirement applies to individual scenarios (loan origination, refinance or further lending / increase) refer to the below table:

New Wording:

A substantial benefit requires that each co-borrower must get a real and tangible benefit arising out of the underlying transaction. That is, where there are 2 or more co-borrowers:

Each co-borrower has a direct legal or equitable ownership interest of at least 30%* in the asset (i.e. property) being purchased with the loan funds, or
At least 30%* of the loan funds will be used to repay or refinance debts or other obligations in each co-borrower’s name.

*If there are more than two co-borrowers, or the co-borrowers have different levels of ownership, then the percentage figure may be reasonably adjusted. If the minimum percentage is not met, consider whether the applicant who is not receiving a substantial benefit from the loan is better protected under a guarantor structure.

In meeting the banks R&O requirements to determine a borrowers Substantial Benefit, lenders must:

Enquire of the borrowers how the loan funds will be used and ensure the percentage of loan funds used meets the policy minimum: and
Record in the loan origination system, details of the customer’s response and the reasons why both borrowers will receive a substantial benefit.

Change 2

Update to 2.5.3 “Co-borrowing where substantial benefit test has not been met – spousal allowable exceptions” – and will now be titled: “Co-borrowing where substantial benefit test has not been met”

Old Wording:

Where the substantial benefit tests (refer Substantial benefit test) has not been met for a co-borrower, the only allowable exceptions are as follows:

Sample lending scenario	Allowable exceptions
1) Co-borrowers are spousal (married or de facto) And Security is already owned by one co-borrower. Co-borrowers on the debt being refinanced from other financial institution are identical to the co-borrowers on the new application. Or Co-borrowers are spousal (married or de facto) And Security is being purchased in the name (of) one co-borrower only with loan funds from this application.	The security property is or will be, the primary residence of both borrowers (The benefit is that both co-borrowers will have a place to reside and would not need to maintain separate owner occupied homes) Or The proposed structure is for asset(s) protection e.g. One of the co-borrowers is Self-Employed and / or in a professional field of employment (e.g. Director, Doctor, Accountant or Lawyer etc) Or The proposed structure is to maximise taxation benefits e.g. The loan purpose is to purchase or refinance an investment property and the structure supports a beneficial taxation strategy A new co-borrower cannot be added simply to boost serviceability capacity
2) Co-Borrowers are spousal (married or de facto) and Security being refinanced to us is already owned. Debt being refinanced is in a sole name however the new loan application has been submitted as a co-borrower application.	This may be considered an acceptable co-borrower structure when the co-borrowers inform us that the debt repayments come from the household income Note: The substantial benefit requirement is to be satisfied on the information the customer has provided us in the course of the loan application. However, further clarification must be sought from the customer if the information they provide conflicts with any other information disclosed in the application
Note: when the application qualifies with the above allowable spousal exceptions the following must be completed in all instances Take reasonable steps to ensure that the individual who does not appear to be receiving a substantial benefit: understands the risks of entering into the loan and understands the difference between being a co-borrower and a guarantor and has received the ‘Fact Sheet: Co-borrower or Guarantor?’ and provided the reasons why they want to be a co-borrower, and the broker is satisfied that the individual is not experiencing financial abuse and Record details of the customers response and the reasons why the loan should proceed in the origination system. There is no requirement to refer to Credit if all of the above conditions are met.

New Wording:

Where the substantial benefit test (refer Substantial benefit test) has not been met for a co-borrower, If the borrowers still want to proceed the broker must take reasonable steps to ensure that the individual who does not appear to be receiving a substantial benefit:

understands the risks of being a co-borrower on the loan; and
understands the difference between being a co-borrower and a guarantor; and
has received the ‘Fact Sheet: Co-borrower or Guarantor?’; and
provided the reasons why they want to be a co-borrower; and the broker is satisfied that the individual is not experiencing financial abuse; and
record details of the customer’s response and the reasons why the loan should proceed in the origination system

Spousal Applications (max 2 borrowers)	Non-Spousal applications
Assessor may progress the application provided they are satisfied with the details provided in the above steps	Assessor must refer the application to the Credit Decisioning team

Change 3

Added to Loan Purpose > Unacceptable loan purpose:

Portability/Substitution with new lending (I.e., portability/substitution with simultaneous settlement)

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03.10 Guarantees

Policy ID

03.10

Policy Name

Guarantees

Policy Content

1. About this policy
1.1 Why this policy
1.2 What is a guarantee?
1.3 National Credit Code and Banking Code of Practice
2. Rules you must apply
2.1 Guarantee types and guarantors
2.1.1 Guarantor direct benefit
2.1.2 'Other' Guarantee types
2.1.3 Unacceptable Guarantors
2.2 Policy rules per acceptable guarantee type
2.2.1 Spousal-Security Guarantee
2.2.2 Spousal Income Guarantee
2.2.3 Spousal- Income + Security Guarantee
2.2.4 Family Security Guarantee
2.2.5 Shared Equity Guarantee
2.3 Guarantee amount-NCC and BCoP
2.4 Calculating available equity, guarantee amount and LVR
2.4.1 Calculating available equity, guarantee amount and LVR for a Family-Security Guarantee
2.4.2 Calculating available equity, guarantee amount and LVR for a Shared Equity Guarantee
2.5 Providing advice to borrowers and guarantors
2.6 Independent legal advice
2.6.1 Determining written legal advice evidence requirements
2.6.2 Independence of the solicitor
2.6.3 Legal advice dispensation
2.6.3.1 Determining undue influence on the guarantor
2.7 Financial Support Acknowledgement and Undertaking
2.8 Accepting a guarantee- three (3) day requirement
3. Case examples
3.1 Determining guarantee scenarios

1. About this policy

1.1 Why this policy

This policy identifies all acceptable guarantee types and their associated requirements
You must read this policy in conjunction with:

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

1.2 What is a guarantee?

A guarantee is a contractual promise given by a third party, i.e. the guarantor, who agrees, that in the event the customers are unable or unwilling to repay the loan, the guarantor is liable for the amount of the limited guarantee.

1.3 National Credit Code and Banking Code of Practice

The National Credit Code (NCC) and the Banking Code of Practice (BCoP) provide protections to individuals who enter into a guarantee as security for a loan.
For details of the Banking Code of Practice requirements relating to Guarantees, refer to:

Banking Code of Practice (BCoP)

Also refer to:

Independent legal advice
Guarantee amount-NCC and BCoP

In all instances, prospective guarantors are to be informed that they need to make any appropriate enquiries about the credit worthiness, financial position and integrity of the borrowers. This should be pointed out at application and again at approval. (The prospective guarantors are reminded of this prior to signing the Guarantee and Indemnity.)

2. Rules you must apply

2.1 Guarantee types and guarantors

For Consumer Lending policy, the Bank requires a guarantor to be an individual. An entity cannot be a guarantor.

The ‘Policy rules per guarantee type' tables specify:

and define the acceptable guarantee types and acceptable guarantors. Acceptability is also subject to:
- appropriate assessment of the borrower and guarantor Requirements and Objectives, and
- and all credit requirements being met
The acceptable guarantors according to the guarantee type
Other applicable policy rules

Exceptions may be considered by Credit, subject to strong mitigating reasons being provided.

2.1.1 Guarantor direct benefit

Requirements for establishing that the guarantor will receive a direct benefit will vary from one application to another.

Westpac Group is required to demonstrate that the guarantor made a fully informed decision and will receive a measurable benefit that is comparable to the risk they are taking on. A financial benefit is the easiest to define and measure (e.g. the guarantor living in the property they are guaranteeing free of rent).

Non-financial benefit is more difficult to measure and is, therefore, unlikely to be approved where the relationship is something other than a parent guaranteeing a loan for their children or a Shared Equity Guarantee.

2.1.2 ‘Other’ Guarantee types

Guarantee types other than those specified under ‘ Policy rules per guarantee type ' a are generally not acceptable unless a Guarantor direct benefit can be established.

Credit approval is required for any ‘other’ guarantee type, and the application must be referred to Credit for assessment before any provisional approval decision is advised to the borrower.

Regardless of the guarantee amount, the borrowers are required to contribute a minimum 5% of the value of a security collateral being purchased plus purchase costs. These funds:

re to be visible in the applicants' assets with a comment in ApplyOnline detailing which assets are being used to meet this requirement
are not required to comply with to comply with Genuine Savings policy.

2.1.3 Unacceptable Guarantors

Non-Residents - refer to Lending to Non-Australian Citizens policy
Temporary Australian Residency Visa Holders - refer to Lending to Non-Australian Citizens policy >Visa Matrix and Applicant via Resident Type Matrix
Permanent Australian Residency Visa holder not holding an acceptable borrower visa type as per the Lending to Non-Australian Citizens policy >Visa Matrix and Applicant via Resident Type Matrix
Entities
For Family-Security Guarantee, Guarantor relationships other than those listed are unacceptable e.g. non-guardians, uncles, aunts, grandparents, non-family members
Any guarantor not identified as acceptable in this policy, or approved as an exception by Credit

2.2 Policy rules per acceptable guarantee type

Serviceability Assessment policy specifies when household expenses and/or commitments can be apportioned between the borrower and a non-income reliant guarantor.
For further information, refer to Serviceability Assessment > Rules you must apply:

Apportioned household expenses and shared commitments – Spousal same household; and
Apportioned shared commitment rule.

2.2.1 Spousal- Security Guarantee
Definition	The guarantor’s security is used as security collateral to support the consumer mortgage application (it may also be co-owned by the borrower) , and The guarantor’s income is not used in the serviceability assessment . The borrower must be able to service the loan on their own, or by virtue of a company or trust completely controlled by the borrower alone.
Acceptable guarantor relationship to the borrower	The borrower’s spouse
Unacceptable guarantors	Refer to ‘Unacceptable Guarantors’
Loan product and amount	Standard policy applies
Loan purpose	Standard policy applies
Loan structure	A 'Spousal-Security' guarantee is required from the mortgagor who is not the borrower
Guarantee security collateral	Guarantee security collateral type is a: Property, or Westpac Bank Term Deposit (WBC brand only) and complies with: 'Acceptable Security Collateral' policy, and 'Security Collateral Value Assessment' policy
Guarantee limit (guarantee amount $)	Must be equal to the loan amount Also refer to ‘Guarantee amount-NCC and BCoP’
Loan to Value Ratio (LVR)	Refer to Loan to Value Ratio (LVR) policy
Guarantor’s financial position and serviceability	Borrower's income only is used for serviceability, and Guarantor must provide details related to their: Guarantee security collateral, and Existing mortgage or existing guarantee commitments against their guarantee security collateral
Guarantor’s credit bureau check	Not required
Lender’s Mortgage Insurance additional policy rules	Not available in OBP
Independent Legal Advice	Required Also refer to ‘Independent Legal Advice’
Verification activity required against the guarantor
Guarantor’s commitments	Mandatory to verify the limit and balance of any existing mortgage against the guarantee security collateral. Verification document and allowable variances are as per Commitments Policy, and It is recommended to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation
Guarantor’s income	Not required, except where: the Guarantor is also being tested as per Serviceability >Rules you must apply>Apportioned household expenses and shared commitments - Spousal same household policy
Guarantor’s security collateral	Title search required
Validation of information provided by the customer (guarantor)	Not required
Guarantor’s Exit Strategy	Not required

2.2.2 Spousal Income Guarantee
Definition	The guarantor’s income is used in the serviceability assessment , as the borrower’s capacity to service the loan commitment is dependent on the income of the guarantor, and The guarantor’s security is not used as guarantee security collateral to support the loan application
Acceptable guarantor relationship to the borrower	The borrower’s spouse
Unacceptable guarantors	Refer to ‘Unacceptable Guarantors’
Loan product and amount	Standard policy applies
Loan purpose	Standard policy applies
Loan structure	Application must be for one borrower only plus their one spousal guarantor i.e. No other party on the loan
Guarantee security collateral	Not applicable-income only guarantee
Guarantee limit (guarantee amount $)	Must be equal to the loan amount Also refer to ‘Guarantee amount-NCC and BCoP’
Loan to Value Ratio (LVR)	Refer to Loan to Value Ratio (LVR) policy
Guarantor’s financial position and serviceability	Borrower's and guarantor's income is used for serviceability, and Serviceability cannot be 100% reliant on the guarantor's income. The borrower must also generate an income in their own capacity which is used for serviceability, and Guarantor must provide details related to their Income (including Employment details), and Living Expenses, and Commitments, and Assets
Guarantor’s credit bureau check	Mandatory
Lender’s Mortgage Insurance additional policy rules	Standard policy applies
Independent Legal Advice	Recommended Also refer to ‘Independent Legal Advice’
Verification activity required against the guarantor
Guarantor’s commitments	Verify as per ‘ Commitments’ Policy
Guarantor’s income	Verify as per ‘Verifying Income policy
Guarantor’s security collateral	Not applicable-income only guarantee
Validation of information provided by the customer (guarantor)	Verify as per 'Loan Application and Approval > Validation of information provided by the customer ' policy
Guarantor’s Exit Strategy	Verify as per Maximum Loan Term policy

2.2.3 Spousal- Income + Security Guarantee
Definition	The guarantor’s income is used in the serviceability assessment, as the borrower’s capacity to service the loan commitment is dependent on the income of the guarantor, and The guarantor’s security is used as guarantee security collateral to support the consumer mortgage application (it may also be co-owned by the borrower)
Acceptable guarantor relationship to the borrower	The borrower’s spouse
Unacceptable guarantors	Refer to ‘Unacceptable Guarantors’
Loan product and amount	Standard policy applies
Loan purpose	Standard policy applies
Loan structure	Application must be for one borrower only plus their one spousal guarantor i.e. No other party on the loan
Guarantee security collateral	Guarantee security collateral type is a: Property, or Westpac Bank Term Deposit (WBC brand only) and complies with: 'Acceptable Security Collateral' policy, and 'Security Collateral Value Assessment' policy
Guarantee limit (guarantee amount $)	Must be equal to the loan amount Also refer to ‘Guarantee amount-NCC and BCoP’
Loan to Value Ratio (LVR)	Refer to Loan to Value Ratio (LVR) policy
Guarantor’s financial position and serviceability	Borrower's and guarantor's income is used for serviceability, and Serviceability cannot be 100% reliant on the guarantor's income. The borrower must also generate an income in their own capacity which is used for serviceability, and Guarantor must provide details related to their: Income (including Employment details), and Living Expenses, and Commitments, and Assets
Guarantor’s credit bureau check	Mandatory
Lender’s Mortgage Insurance additional policy rules	Not available in OBP
Independent Legal Advice	Required Also refer to ‘Independent Legal Advice’
Verification activity required for the guarantor
Guarantor’s commitments	Verify as per ‘Commitments’ Policy • It is recommended to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation
Guarantor’s income	Verify as per Verifying Income policy
Guarantor’s security collateral	Title search required
Validation of information provided by the customer (guarantor)	Verify as per 'Loan Application and Approval > Validation of information provided by the customer ' policy
Guarantor’s Exit Strategy	Verify as per Maximum Loan Term policy

2.2.4 Family Security Guarantee
Definition	This guarantee type allows acceptable family members with equity available in their own property or a Term Deposit to help borrowers cover the shortfall between the security value extended against the borrower’s property and the proposed loan amount. The guarantor’s security is used as security collateral to support the loan application, and The guarantor’s security collateral is not co-owned by the borrower (refer to Share Equity Guarantee if it is co-owned), and The guarantor’s income is not used in the serviceability assessment. The borrower must be able to service the loan on their own, or by virtue of a company or trust completely controlled by the borrower alone.
Acceptable guarantor relationship to the borrower	The guarantor/s is the borrower’s: • Parent/s or step-parents or legal guardian/s, or • Son/s or daughter/s or step-children • Sibling/s or step-siblings
Unacceptable guarantors	Refer to ‘Unacceptable Guarantors’
Loan product and amount	Loan Product Unacceptable where borrower is seeking a Bridging Loan Loan Amount Can finance up to 100% of the purchase price, refinance amount or construction cost and direct purchase costs associated with the security purchase / refinance / construction and provision of the loan: direct costs include Government costs, Solicitors costs, eligible Bank fees and Insurance costs.
Loan purpose	Acceptable: Purchase, construction or refinance of a property for investment, where borrowers do not have ownership of any other property at the time of application, or Purchase, refinance, construction of, or home improvements to a property for owner occupation where the borrower(s) collectively do not have ownership of more than one other property at the time of consumer mortgage application and the already owned property does not have sufficient equity to provide security for the new purchase without incurring mortgage insurance. Plus: If Construction or Home improvements, must be by Licensed Builder (not available for Owner Builder) and funded by progress payments, and If existing loan increase for home improvement, an existing Family-Security Guarantee limit cannot be increased (loan will need to be re-originated) Unacceptable: (For new originations or increases to existing loans) including but not limited to: Refinance of any debt other than that listed as ‘acceptable’ above (e.g. non-mortgage debt consolidation of any personal debts such as credit card or personal loans into the loan amount). Exceptions to this policy condition are not permitted Family-Security Guarantee added to an existing loan (loan will need to be fully re-originated Construction or Home Improvement by Owner Builder Cash Out Access to equity in the borrower’s security collateral for the purpose of providing supporting security collateral to another loan. Borrower’s security collateral cannot be used to support further lending while a Family-Security Guarantee is in place (via cross collateralisation or debt allocation /debt apportioning). If equity has been established in the borrower’s property, the borrower(s) are encouraged to release the Family-Security Guarantee / guarantor’s security property. Once the borrower is no longer receiving a benefit from a Family-Security Guarantee, application processing can continue as per standard policy for home loan option and debt allocation may be considered Also refer to ‘Subject to Credit Approval’
Loan structure	A guarantee is required from each mortgagor who is not a borrower for a particular facility
Guarantee security collateral	Guarantee security collateral type is a: Property, or Westpac Bank Term Deposit (WBC brand only) and complies with 'Acceptable Security Collateral' policy, and 'Security Collateral Value Assessment' policy Only one guarantee security collateral can be offered for the 'Family-Security Guarantee', and No more than one 'Family-Security Guarantee' in the application Guarantee supported by 1st mortgage Guarantee supported by 2nd mortgage if the 1st mortgage is to another financial institution and is not a 'Reverse Mortgage' styled facility² Unacceptable: Individual borrower/s with more than one Family- Security Guarantee ¹
Guarantee limit (guarantee amount $)	No single Family-Security Guarantee can exceed 50% of the value of the guarantor's security collateral (Exceptions can be referred to Credit) Also refer to: ‘Guarantee amount-NCC and BCoP’ Calculating available equity, guarantee amount and LVR>Family-Security Guarantee
Loan to Value Ratio (LVR)	Refer to: Loan to Value Ratio (LVR) policy Calculating available equity, guarantee amount and LVR>Family-Security Guarantee
Guarantor’s financial position and serviceability	•Borrower's income only is used for serviceability • Guarantor must provide details related to their: Guarantee security collateral Existing mortgage or existing guarantee commitments against their guarantee security collateral
Guarantor’s credit bureau check	Not required
Lender’s Mortgage Insurance additional policy rules	Not available in OBP
Independent Legal Advice	Required Also refer to ‘Independent Legal Advice’
Subject to Credit Approval	Initial purchase of vacant land with a 'Family-Security Guarantee' but without a building contract in place, and mortgage insurance is not required. Internal refinance at a future date is allowed to fund the construction of a dwelling. A new Family-Security Guarantee will need to be included at the time the internal refinance occurs to allow for the increased loan amount.
Verification activity required for the guarantor
Guarantor’s commitments	Mandatory to verify the limit and balance of any existing mortgage against the guarantee security collateral³ . Verification documents and allowable variances are as per Commitments Policy Mandatory to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation³
Guarantor’s income	Not required
Guarantor’s security collateral	Title search required
Validation of information provided by the customer (guarantor)	Not required
Guarantor’s Exit Strategy	Not required
¹ The same property can be used for more than one Family- Security Guarantee (e.g. a security collateral may be offered as a Family-Security Guarantee to support other eligible family member's loan). Any associated existing Guarantee amounts must be reflected against the guarantee security collateral to support 'Available Equity' and 'LVR' calculations ² If the Family-Security Guarantor's collateral has an existing mortgage, staff are to confirm that the existing facility is not a reverse mortgage-styled facility. Where the existing facility is a reverse mortgage, the application is unable to proceed as the Bank is unable to establish a defined amount for priority under the first mortgage ³ Confirm with the guarantor the total amount of any existing debts that may be secured by the guarantee property. The guarantor may need to consider not only the current balance of the primary loan they have outstanding, but any available redraw / unused credit limits, any prior guarantees issued to other family members, business overdrafts or investment loans which may have been supported (cross-collateralised) against the guarantors security property.

2.2.5 Shared Equity Guarantee
Definition	A borrower is seeking to access their equity share of a property which is currently owned as, or is being purchased or constructed as ‘Tenants in Common’ or ‘Joint Tenants’ with a non-spousal party/ies (e.g. sibling, parents, friends) The ‘shared equity’ property is used as the guarantee security collateral to support the consumer mortgage application, and The guarantor owns a share of the property being offered as the guarantee security collateral, and The guarantor’s income is not used in the serviceability assessment. The borrower must be able to service the loan on their own, or by virtue of a company or trust completely controlled by the borrower alone.
Acceptable guarantor relationship to the borrower	Any relationship except ‘spouse’
Unacceptable guarantors	The guarantor must be a natural person in their own right (i.e. cannot be a director of a company or trustees of a trust) Cross-guarantee i.e. A and B are non-spousal. A and B are purchasing (MV: 100,000) with 50-50 ownership. A and B are each taking a loan (40,000 each) in their own name A provides guarantee to B and B provides guarantee to A (guarantee equal to loan amount). i.e. A and B are cross-guaranteeing each other for their shared purchase property Also refer to ‘Unacceptable Guarantors’
Loan product and amount	Loan Product: Unacceptable where borrower is seeking a Bridging Loan
Loan purpose	No rules in addition to standard policy
Loan structure	A guarantee is required from each mortgagor who shares ownership of the property and is not a borrower for a particular facility
Guarantee security collateral	Guarantee security collateral type is a property and complies with: Acceptable Security Collateral policy, and Security Collateral Value Assessment policy, and Guarantee security collateral is the only security collateral offered Guarantee supported by 1st mortgage, or Guarantee supported by 2nd mortgage if the 1st mortgage is to another financial institution and is not a 'Reverse Mortgage' styled facility¹ - subject to Credit approval
Guarantee limit (guarantee amount $)	Cannot exceed the borrower’s share of equity in the guarantee security collateral Also refer to: ‘Guarantee amount-NCC and BCoP’ Calculating available equity, guarantee amount and LVR>Shared Equity Guarantee
Loan to Value Ratio (LVR)	Refer to Loan to Value Ratio (LVR) policy
Guarantors financial position and serviceability	Borrower's income only is used for serviceability, and Guarantor must provide details related to their: Guarantee security collateral, and Existing mortgage or existing guarantee commitments against their guarantee security collateral
Guarantors credit bureau check	Not required
Lender’s Mortgage Insurance additional policy rules	Not available in OBP
Independent Legal Advice	Required Also refer to ‘Independent Legal Advice’
Subject to Credit Approval	Existing commitment (guarantor or borrower) against the guarantee security collateral. Referral required to manually calculate available equity.
Verification activity required for the guarantor
Guarantor’s commitments	Mandatory to verify the limit and balance of any existing mortgage against the guarantee security collateral¹ Verification documents and allowable variances are as per Commitments Policy Mandatory to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation¹
Guarantor’s income	Not required
Guarantor’s security collateral	Title search required
Validation of information provided by the customer (guarantor)	Not required
Guarantor’s Exit Strategy	Not required
¹ Confirm with the guarantor the total amount of any existing debts that may be secured by the guarantee property. The guarantor may need to consider not only the current balance of the primary loan they have outstanding, but any available redraw / unused credit limits, any prior guarantees issued to other family members, business overdrafts or investment loans which may have been supported (cross-collateralised) against the guarantors security property.

2.3 Guarantee amount-NCC and BCoP

Under NCC a guarantee can secure an amount that does not exceed the sum of the borrower’s liabilities, plus reasonable expenses of enforcing the guarantee, or any lesser amount agreed between us and the guarantor. BCoP also requires a guarantee to limit the guarantor’s liability.

2.4 Calculating available equity, guarantee amount and LVR

2.4.1 Family-Security Guarantee

The amount of available equity in security collateral offered as the ‘Family –Security Guarantee’ must be determined, to ensure there is sufficient equity to provide the guarantee.
The LVR calculation allows us to determine whether the loan requires mortgage insurance.

The table below details how to calculate available equity, guarantee amount and LVR for a loan involving a ‘Family-Security Guarantee’.

Feature	Calculation
Available Equity in the Family-Security Guarantee Collateral	Determine: A. the guarantee security collateral value B. the maximum non LMI LVR as per Loan to Value (LVR) policy C¹. any existing commitments (such as mortgages, pledges, debts, guarantees, pledges, business overdrafts or other liabilities) which have a right against the guarantee security collateral Available Equity =(A ‘Guarantor’s security collateral value’ multiplied by B ‘Non LMI LVR%’) minus C¹ ‘Existing commitments’
Guarantee Limit/Amount	Determine: A. Loan amount B. the non- guarantee security collateral value C. the non MI LVR for the non-guarantee security collateral as per Loan to Value (LVR) policy D. the non MI LVR for the guarantee security collateral as per Loan to Value (LVR) policy Guarantee Limit/Amount = (A ‘Loan amount’ minus (B ‘Non-guarantee security collateral value’ multiplied by C ‘Non MI LVR% for the non-guarantee security collateral’ )) divided by D ‘Non MI LVR% for the guarantee security collateral’
LVR	Refer to Loan to Value (LVR) policy>LVR Calculation
Legend ¹Add a 20% buffer to the value of a debt (higher of limit or outstanding balance) secured by a first mortgage to an ‘other’ financial institution. SGB, BSA, BoM and RAMS are considered to be ‘other’ financial institutions.

2.4.2 Shared Equity Guarantee

The amount of available equity in security collateral offered as the Shared Equity must be determined, to ensure there is sufficient equity to provide the Shared Equity guarantee.

The table below illustrates the calculation of LVR, available equity and guarantee amount for a loan involving a ‘Shared Equity Guarantee’

Feature	Calculation
Available Equity in the Shared Equity Guarantee Collateral	Determine: A. the guarantee security collateral value B. the maximum non LMI LVR as per Loan to Value (LVR) policy C ¹ . any existing commitments (such as mortgages, pledges, debts, guarantees, pledges, business overdrafts or other liabilities) which have a right against the guarantee security collateral D. The ownership percentage of the borrower and the guarantor/s Available Equity = ( A ‘ Guarantor’s security collateral value’ multiplied by B ‘Non LMI LVR%’) minus C ¹ ‘Existing commitments’
LVR	Refer to Loan to Value (LVR) policy>LVR Calculation
Legend ¹ Add a 20% buffer to the value of a debt (higher of limit or outstanding balance) secured by a first mortgage to an ‘other’ financial institution. SGB, BSA, BoM and RAMS are considered to be ‘other’ financial institutions.

2.5 Providing advice to borrowers and guarantors

The guarantor must be interviewed separately in the absence of the borrower.
When the proposed loan is either wholly or in part secured by a guarantee, the ‘Advice requirements’ in the table below apply.

Applicant type	Advice requirements
Borrower	The prospective borrowers must be made aware of the following requirements at the time of the interview: Loans that involve individuals providing a guarantee type of ‘Family-Security Guarantee’, 'Shared Equity Guarantee', ‘Spousal-Security Guarantee’ or ‘Spousal-Income + Security Guarantee’ are conditional on the guarantors obtaining independent legal advice and the Bank requires evidence that legal advice has been obtained. Independent legal advice is recommended but not mandatory for individuals providing a guarantee type of ‘Spousal-Income Guarantee’ The solicitor's cost is the responsibility of the guarantor (or borrower). Do not provide any advice in respect to the nature and effect of the guarantee. Note: Do not entrust the customer / borrower to act as Westpac's 'agent' to procure the guarantor's signature. Hand a copy of the Guarantor's Consent to Variation, Replacement or Alteration (LD164) to each guarantor. Alternatively, the consent form can be posted to the individual guarantor.
Guarantor	The guarantor/s must be interviewed separately by the broker without the borrower present. At the interview, all prospective guarantors must be made aware of that: Independent legal advice and evidence of this advice is mandatory for guarantee types of 'Family-Security Guarantee’, 'Shared Equity Guarantee', ‘Spousal-Security Guarantee’ or ‘Spousal-Income + Security Guarantee’ Independent legal advice is recommended but not mandatory for individuals providing a guarantee type of ‘Spousal-Income Guarantee’ There are financial risks involved in providing a guarantee, i.e. when the borrower is unable to the meet their financial obligations under the loan, the guarantor may need to pay for the debt commitments on behalf of the borrower. The guarantor may request information about the proposed loan to be guaranteed.

2.6 Independent legal advice

‘Policy rules per acceptable guarantee type’ details when independent legal advice is required according to the guarantee type

If legal advice is required, the guarantor needs to obtain this from a solicitor independent of the bank and the borrower to understand their obligations and liability under the guarantee.
The completed Guarantor’s Solicitor’s Certificate is to be provided to the Bank prior to settlement (i.e. release of loan funds) to evidence that independent legal advice has been received.
Waiving of independent legal advice where it is required under policy may only be approved by Credit on exception basis.

2.6.1 Determining written legal advice evidence requirements

The written legal advice evidence requirements vary based on the guarantor’s location:

State	Requirements
Australian Capital Territory Victoria Northern Territory Western Australia South Australia Queensland Tasmania	A solicitor’s or barrister’s certificate Independent legal advice is difficult to get in South Australia, Western Australian and Tasmania. However, the inability to obtain this advice is not grounds to warrant a waiver
New South Wales	Statutory declaration made by the guarantor and witnessed by: The solicitor who gave the legal advice A justice of the peace, who is a member of the Australian Institute of Conveyancers
Note: The solicitor's certificate makes provision for more than one guarantor. Nevertheless, as a matter of policy, the documentation pack will include a separate form of certificate for each guarantor (certificates that have been amended to include more than one guarantor will be accepted). It is not for the Bank to be instructing solicitors as to who might be present at the time the advice is given.

2.6.2 Independence of the solicitor

The guarantor's solicitor must be independent of the Bank and the borrower, this includes:

The solicitor is not to be a solicitor for the Bank or for the borrower in the particular transaction
The solicitor is not being a solicitor for any other interested party who might have previously given security. An example of an interested party is a guarantor who, having previously provided security, stands to benefit by way of reduced liability, from any additional security given by other guarantors.
The solicitor is not to be a partner of any solicitor who acts for the borrower or other interested party.

Exemption of independence rule
The solicitor can amend the certificate to signify that they also act for the borrower. Westpac Group, as a matter of policy exception, will generally accept the solicitor's certificate in such cases.
Exemption will not apply, for example, if:

A guarantor is open to influence by the others, or
One guarantor is a spouse of the director who 'runs' the business, and is only involved in a formal manner or in some minor capacity

2.6.3 Legal advice dispensation

Request for legal dispensation will be considered by Credit on an exception basis.

2.6.3.1 Determining undue influence on the guarantor

If the Bank knows, or suspects, the guarantee relationship is one of dependency, reliance, or dominance, you must insist on independent legal advice and a solicitor’s certificate. Otherwise, the courts might presume that there was undue influence and set aside the guarantee.

To help to determine whether there is undue influence, consider the following questions:

Might anyone, in addition to the borrower, benefit from the guarantee being given?

This could include:

Other individuals who have already given, or are about to give, guarantees (e.g. husband and wife)
If the borrower is a trust, a beneficiary of the trust, or
Anybody else who has a significant direct or indirect interest in the borrower (e.g. shareholder)

What is the nature of the relationship between the guarantor and any other benefited person?

With some relationships there is a presumption of undue influence no matter (e.g. solicitor and client; parent and dependent child; trustee and beneficiary; priest and parishioner; doctor and patient). With others it depends on individual circumstances.

Where a spouse is providing a guarantee, it is strongly recommended to insist on a solicitor's certificate except where it is clear that the spouse is:

Financially sophisticated
Aware of the borrower's position
Obtaining some benefit from the transaction.

Examples

Example Scenario	Description
A Spouse guaranteeing their partner’s debt	In the normal case of a spouse guaranteeing their partner's debts, the legal position is not clear. It is safer where a spouse is providing a guarantee to strongly recommend on a solicitor's certificate except where it is clear that the spouse is: Financially sophisticated Aware of the borrower's position Obtaining some benefit from the transaction.
Family-Security Guarantees	Aged parents providing a guarantee to their children.

2.7 Financial Support Acknowledgement and Undertaking

The ‘Financial Support Acknowledgement and Undertaking’ must be signed by the guarantor for the below guarantee types:

Spousal-Income Guarantee
Spousal-Income + Security Guarantee

2.8 Accepting a guarantee- three (3) day requirement

Once the guarantor has been provided with:

The terms and conditions of the guarantee
Any notice of demand the Bank has made on the borrower in the past two years
A copy of the borrower’s loan contract
A copy of the borrower’s credit report
A copy of the borrower’s financial accounts or statements held in the last two years for the guaranteed loan.
A copy of any other information the guarantor reasonably requests about the guaranteed loan

Then the guarantor has a minimum of three days to consider the guarantee they are about to provide. We must not accept the signed and returned guarantee document until after the third day.

The only exceptions we will consider and allow the guarantee to be accepted prior to three days are as follows:

If the guarantor has obtained independent legal advice and provided evidence
If the guarantor is acting as trustee for a trust on the loan application.

Note: accepting the guarantee document back from the guarantor is different to requiring independent legal advice. All requirements of this policy must be met.

Refer to the Banking Code of Practice (BCOP) on signing and when to accept a guarantee.

3. Case examples

3.1 Determining guarantee scenarios

This section does not attempt to cover every scenario where a guarantee is acceptable.

No.

Guarantee Scenario

Regulation

Structure to be used

A and B own a property jointly
A wishes to borrow to purchase an investment property in their own name
Mortgages over investment property and the property owned by A and B are to be offered as security

Regulated by Banking Code of Practice (BCoP):
Yes (investment and owner occupied)
Regulated by National Credit Code (NCC):
Yes

Guarantee required?

If A and B are:
- Spousal- a Spousal-Security Guarantee applies if guarantor income is not being used for serviceability. The guarantee limit/amount must be for the full amount of the loan
- Spousal-a Security + Income Guarantee applies if guarantor income is being used for serviceability (WBC only) . The guarantee limit/amount must be for the full amount of the loan
- Non-spousal-a ‘Shared Equity Guarantee’ applies. The guarantee limit/ amount cannot exceed the borrower’s share of equity in the guarantee security collateral

Independent legal advice required?

Yes, legal advice required for B

Serviceability?

Guarantor’s income cannot be used in serviceability except for ‘Spousal- Security + Income Guarantee’ type
Be aware that for Spousal- Security Guarantee’ type, ‘B’ may be considered under ‘Serviceability>Apportioned Household Expense’ policy

B and C offer their jointly owned property as additional security for A
B and C are parents of A
A is borrowing to purchase either an investment or owner occupied property.

Regulated by Banking Code of Practice (BCoP):
Yes (investment and owner occupied)
Regulated by National Credit Code (NCC):
Yes

Guarantee required?

Yes, from B and C supported by mortgage over their jointly owned property. A ‘Family-Security Guarantee’ type applies
If B and C are not eligible family members to provide a ‘Family Security Guarantee’, this guarantee structure is outside of policy and can only be considered by Credit as an exception on a case by case basis.

Independent Legal advice required?

Yes, Legal advice required for guarantee from B and C.

Serviceability?

A must be able to service loan

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	8 November 2021	Links updated
3	21 November 2021	Updated Guarantee Matrix to V7.0 to reflect “LMI not available in OBP’ for ‘Spousal-Security’ and ‘Spousal-Security + Income’ guarantees (OBP capability decision)
4	22 May 2022	Introduction of policy rules for the (new) guarantee type ‘Shared Equity Guarantee’ Under section ‘What is a guarantee’: Clarification change from: ‘A guarantee is a contractual promise given by a third party, i.e. the guarantor, who agrees to have a liability to pay for the loan, or a limited amount of the loan in the case of a Family Security Guarantee, if the customers are unable or unwilling to repay the loan. Clarification change to: A guarantee is a contractual promise given by a third party, i.e. the guarantor, who agrees, that in the event the customers are unable or unwilling to repay the loan, to have a liability to pay for the loan, or, a limited amount of the loan in the case of a Family-Security Guarantee or Shared Equity Guarantee. Added ‘Shared Equity Guarantee’ to the above definition Policy rules previously contained within the ‘Guarantee Matrix’ (which was an Excel attachment to this policy) have been relocated to the main body of this policy. The ‘Guarantee Matrix’ is now superseded Under section ‘Guarantee Types and guarantors’: deleted the instruction to refer ‘Entities’ to Business Banking added ‘acceptability is also subject to appropriate assessment of the applicant and guarantor Requirements and Objectives, and all credit requirements being met and other applicable policy rules’ added subheading ‘Direct Benefit’: moved existing content under this subheading Added Shared Equity Guarantee as an example of a non-financial benefit Under section ‘Unacceptable guarantors’ added ‘Permanent Australian Residency Visa holder not holding an acceptable borrower visa type as per the Migrant Lending Policy >Visa Matrix and Applicant via Resident Type Matrix (clarification only-no change to policy or risk appetite which previously specified ‘wording ‘Note: A borrower that is unacceptable as per the Visa Matrix and Applicant via Resident Type Matrix is also unacceptable as a guarantor’) Under section ‘Policy rules per guarantee type’: added ‘Serviceability policy specifies when household expenses and/or commitments can be apportioned between the borrower and a non-income reliant guarantor. Refer to Serviceability Assessment > Rules you must apply> ‘Apportioned household expenses’ and the ‘Apportioned shared commitment rule’ for these policy rules’ -clarification only to direct user to other relevant existing policies Changed ‘Spousal- Security Guarantee’ and ‘Family-Security Guarantee’: From: ‘The guarantor’s income is not used to support the loan application’ to ‘The guarantor’s income is not used in the serviceability assessment. The borrower must be able to service the loan on their own, or by virtue of a company or trust completely controlled by the borrower alone.’ -clarification only To clarify that verification of the guarantor’s ‘Exit Strategy is not required’ Changed ‘Family- Security Guarantee’: Added to the definition section: ‘This guarantee type allows other family members with equity available in their own property or a Term Deposit (WBC only) to help borrowers cover the shortfall between the security value extended against the borrower’s property and the proposed loan amount’ -clarification only ’The guarantor’s security collateral is not co-owned by the borrower (refer to Share Equity Guarantee if it is co-owned)’-clarification only plus direction to the new ‘Shared Equity Guarantee’ type’ Added ‘construction’ of an investment or owner- occupied property as an acceptable loan purpose-clarification only Added ‘Home Improvement’ to an owner-occupied property as an acceptable loan purpose-clarification only Clarified that for investment loan purpose, ‘all’ borrowers do not have ownership of another property at the time of application’ -clarification only (policy previously stated ‘the borrowers do not have…’) Clarified that for owner-occupied loan purpose, ‘the borrowers collectively’ do not have ownership of more than one property the time of application’ -clarification only Clarified that for Home improvements, must be via licensed builder (owner builder un-acceptable)-clarification only Clarified that for Construction, must be funded by progress payments-clarification only Deleted ‘If equity has been established in the borrower’s property, the borrower(s) are encouraged to release the Family-Security Guarantee / guarantor’s security property. Once the borrower is no longer receiving a benefit from a Family-Security Guarantee, application processing can continue as per standard policy for home loan option and debt allocation may be considered’ -deleted as this is a procedure and not a credit policy rule From ‘Guarantee supported by 2nd mortgage if the 1st mortgage is not a 'Reverse Mortgage' styled facility’ to ‘Guarantee supported by 2nd mortgage if the 1st mortgage is to another financial institution and is not a 'Reverse Mortgage' styled facility^’ -new words added in bold as a clarification (to align with existing ‘Acceptable Security Collateral’ policy wording From: Guarantee Limit (amount$) ‘Up to 50% of the value of the guarantor's security’ to ‘No single Family-Security Guarantee can exceed 50% of the value of the guarantor's security collateral’- clarification only Deleted ‘Initial spousal joint property purchase, with property later to be transferred to one of the borrowers due to relationship breakdown. The Bank can consider providing finance to either party under a Family-Security Guarantee- subject to Credit approval‘. Clarification correction only, as this is refinance loan purpose is acceptable and does need referral to credit Corrections to refer to ‘security collateral’ -clarification only to align with OBP terminology Changed ‘Spousal- Security Guarantee’: From ‘Note: Best practice (not mandatory) to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation to ‘It is recommended to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation’ To specify that guarantor’s income verification is not required except where the Guarantor is also being tested as per Serviceability >Rules you must apply>Apportioned Household Expense policy’ –(bold wording is new and a clarification only to direct user to other relevant existing policy Changed ‘Spousal- Income Guarantee’ and ‘Spousal- Income + Security Guarantee’: From: ‘The guarantor’s income is used to support the loan application, i.e. the applicant’s capacity to service the loan commitments is dependent on the income of the guarantor’ to ‘The guarantor’s income is used in the serviceability assessment, as the borrower’s capacity to service the loan commitment is dependent on the income of the guarantor’-clarification only From: ’Application must be for one borrower only plus their one spousal guarantor to ‘Application must be for one borrower only plus their one spousal guarantor i.e. No other party on the loan’ -clarification only Included ‘Exit Strategy’ as a verification requirement as per existing ‘Maximum Loan Term’ policy and linked to the ‘Maximum Loan Term policy’-clarification only Specified ‘WBC only’ as these guarantee types are not available to SGB/BoM/BSA Changed ‘Spousal- Income + Security Guarantee’ ‘Commitment Verification’ rules Deleted: ‘Mandatory to verify the limit and balance of any existing mortgage against the guarantee security collateral. The allowable verification documents and allowable variances are as per the Commitments Policy>Customer Commitments Matrix>Confirm Commitment Details (link in heading above), and • Best practice (not mandatory) to verify the guarantee limit for any existing guarantee against the guarantee security collateral. This could be achieved via internal systems or by obtaining a copy of the guarantee documentation Replaced with: ‘Verify as per ‘ Commitments’ Policy’ . Clarification correction only as existing Commitments policy specifies that it applies to income-reliant guarantors. Added section ‘2.3 Guarantee amount-NCC and BCoP’, specifying ‘Under NCC a guarantee can secure an amount that does not exceed the sum of the borrower’s liabilities, plus reasonable expenses of enforcing the guarantee, or any lesser amount agreed between us and the guarantor. BCoP also requires a guarantee to limit the guarantor’s liability.’ Removed existing references to the ‘Commitments Matrix’ (which was superseded) and replaced with links to the Commitments policy Deleted section ‘Providing advice to borrowers and guarantors’- deleted as this is a procedure and not a credit policy rule Updated section ‘Independent legal advice’ to specify ‘‘Policy rules per acceptable guarantee type’ details when independent legal advice is required according to the guarantee type’ Renamed section ‘Exceptions from legal advice’ to ‘Exemptions from legal advice’ Deleted ‘Mortgagor is also a co-borrower’ scenario from section ‘Exemptions from legal advice’ Updated the section ‘Accepting a guarantee-three day requirement’ : Moved content from ‘Process to Follow’ to ‘Rules you must apply’ Added links to BCOP for RRB and WBC Renamed section ‘Determining Guarantee Scenarios’ to ‘Acceptable Guarantee Scenarios’ Updated ‘Acceptable Guarantee Scenarios’: Added ‘This section does not attempt to cover every scenario where a guarantee is acceptable’ Updated scenario 1 to: specify the rules for ‘Spousal-Security’, ‘Spousal-Income+Security’ and ‘Shared Equity’ Guarantee types add ‘Be aware that for Spousal- Security Guarantee’ type, ‘B’ may be considered under ‘Serviceability>Apportioned Household Expense’ policy Deleted scenario 2- as rules covered under scenario 1 (due to changes detailed above) Updated scenario 3: re-numbered as scenario 2 to include ‘B and C are parents of A’ to include ‘A ‘Family-Security Guarantee’ type applies Various formatting/content repositioning only changes to improve ‘readability’ (no change to policy or risk appetite)
5	2 October 2022	Update to content in 2.1.3 Unacceptable Guarantors Old wording Non Residents Temporary Australian Residency Visa Holders Refer to Migrant Lending policy > Visa Matrix and Applicant via Resident Type Matrix Permanent Australian Residency Visa holder not holding an acceptable borrower visa type as per the Migrant Lending Policy > Visa Matrix and Applicant via Resident Type Matrix Entities For Family-Security Guarantee - Guarantor relationships other than those listed are unacceptable e.g. uncles, aunts, grandparents, non-family members Any guarantor not identified as acceptable in this policy, or approved as an exception by Credit New wording Non Residents. Refer to Lending to Non-Australian Citizens policy Temporary Australian Residency Visa Holders. Refer to Lending to Non-Australian Citizens policy > Visa Matrix and Applicant via Resident Type Matrix Permanent Australian Residency Visa holder not holding an acceptable borrower visa type as per the Lending to Non-Australian Citizens policy > Visa Matrix and Applicant via Resident Type Matrix Entities For Family-Security Guarantee - Guarantor relationships other than those listed are unacceptable e.g. uncles, aunts, grandparents, non-family members Any guarantor not identified as acceptable in this policy, or approved as an exception by Credit
6	20 November 2022	Change 1 Policy Standards and Procedure rewrite
7	19 February 2023	Change 1 Change references throughout policy from ‘Apportioned household expenses’ to ‘Apportioned household expenses and shared commitments – Spousal same household
8	24 April 2023	Change references throughout policy from ‘Apportioned household expenses’ to ‘Apportioned household expenses and shared commitments – Spousal same household
9	21 May 2023	Throughout document, redirected references and links from ‘Validation of information provided by the customer’ policy chapter to ‘Loan Application and Approval > Validation of information provided by the customer’. Housekeeping change only

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03.11 Loan Application and Approval

Policy ID

03.11

Policy Name

Loan Application and Approval

Policy Content

1. About this policy
1.1 Why this policy
2 Rules you must apply
2.1 Loan amount including costs
2.1.1 Interest only in advance (IOA) loans
2.2 Customer Interview
2.3 Customers Experiencing Vulnerability
2.4 In Principle Approval (IPA)
2.4.1 In Principle Approval (IPA) / Conditional Approval Validity period
2.5 Full application
2.6 Responsible Lending Start Date
2.7 Validation of information provided by the customer
2.7.1 Reviewing customer provided information
2.7 Currency of Verification
2.8 Acknowledgments, confirmations and consents (for 1^st and 3^rd party channel) or Privacy Statement and other acknowledgements (for digital applications) (Consent Form)
2.9 Pipeline Authority Policy
2.9.1 Pipeline Authority Eligibility
2.10 Playback Form
2.11 Power of Attorney/Administration Order
2.12 Business Purpose Declaration
2.13 Loan Expiry Types and Rules
3. Comprehensive Credit Report (CCR) mismatch

1. About this policy

1.1 Why this policy

The purpose of this policy is to provide an overview of:

Costs which can be included in the loan amount
Consumer mortgage application forms and declarations
Power of Attorney rules
Business lending customer rules
Rules relating to:
- validating information provided by the customer
- the currency of completed verification activities
- the age of verification documents
- expiry dates associated with the consumer mortgage application

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

2. Rules you must apply

Note: Mortgage brokers are unable to submit their own applications i.e., where the finance broker submitting the application is also one of the applicants. Brokers are still able to submit loans for their family (as long as they are not an applicant) and they are also able to have another finance broker within their group submit a loan on their behalf.

2.1 Loan Amount-including costs

Costs associated with the purchase of the collateral (e.g. legal fees and stamp duty) can be included in the loan amount, providing the maximum lending value ratio is not exceeded.

2.1.1 Interest only in advance (IOA) loans

The initial amount of prepaid interest can not be added to the loan amount. The borrower is to provide this amount from their own funds.

2.2 Customer Interview

A formal face to face interview should be completed with the loan applicant(s) or guarantor(s) before acceptance of the loan offer agreement.

The interview process is to be carried out without the presence of a third party – must be between the Broker and applicant(s) or guarantor(s).

2.3 Customers Experiencing Vulnerability

Refer to Eligibility >Customers Experiencing Vulnerability policy

2.4 In Principle Approval (IPA)

In Principle Approval (IPA) is an application type which seeks 'Conditional Approval' only.
Verification of supporting documentation and security collateral assessment is not mandatory.
Consent forms and verification of identity (VOI) must be completed prior to ‘ Review and Submit’ being undertaken for an IPA. Also see:

Acknowledgments, confirmations and consents (for 1^st and 3^rd party channel) or Privacy Statement and other acknowledgements (for digital applications) (Consent Form),
Playback form
Responsible Lending Start Date

When a borrower elects to proceed with the consumer mortgage application, the IPA needs to be converted to a ‘full consumer mortgage application’.
Note: You can-not convert a full application back to an IPA.

2.4.1 In Principle Approval (IPA) / Conditional Approval Validity period

The in principle approval (conditional approval) letter or notification has a validity period of 90 days from the most recent application Review and Submit date (both IPA and Full application stage). The expiry period ends either when the customer mortgage application is unconditionally approved, or the consumer mortgage application is edited and re-assessed resulting in a new in principle approval (conditional approval).

2.5 Full application

A Full consumer mortgage application is an application type which seeks 'Formal Approval' (Unconditional Approval)
An application may be created as a ‘full application’ or may be converted from an IPA to a ‘full application’.
Verification of supporting documentation and security assessment is mandatory for Full Applications.
Consent forms and verification of identity (VOI) must be completed prior to ‘ Review and Submit’ being undertaken for a full application.
Also see:

Acknowledgments, confirmations and consents (for 1^st and 3^rd party channel) or Privacy Statement and other acknowledgements (for digital applications) (Consent Form),
Playback Form
Responsible Lending Start Date

2.6 Responsible Lending Start Date

The Responsible Lending Start Date is used to determine if a verification document complies with the ‘maximum age’ policy.
Refer to:

‘Loan Expiry Types’ and rules for the ‘Responsible Lending Start Date’
Refer to ‘Document Standards’ for the maximum age of verification documents

2.7 Validation of information provided by the customer

Purpose	‘Validation of information provided by the customer’ is part of the Responsible Lending scrutiny check and helps us ensure an accurate loan assessment.
Applicable to	Information provided by a borrower or income guarantor for the Consumer mortgage application types: new loan loan increase servicing / variation activity requiring a serviceability assessment
Policy exclusion	This policy does not apply to a Bridging ICAP loan with no end debt
Associated policies	You may also need to refer to other lending policy rules, including but not limited to: Commitments Guarantees Living Expenses Serviceability assessment If the application requires mortgage insurance, where required refer to: Lenders Mortgage Insurance

2.7.1 Reviewing customer provided information

What to review
The last three months of internal account¹ transactions (excluding non Flexi WBC Personal Loans) Supporting documents used to comply with normal loan assessment policy (e.g. income verification) Any document received, even if it is not mandatory Comprehensive Credit Bureau report (CCR) – manually review the CCR for new loans and loan increases only. Refer to Comprehensive Credit Report (CCR) Mismatch
Conflicts to look for		Action required
Commitments:	Any commitment: that is undisclosed where there is mismatch to the Comprehensive Credit Bureau Report (CCR)	Where a conflict is identified With the exception of outgoing child support (maintenance) payments, outgoing alimony (spousal support) and outgoing rent / board, it is not a requirement to obtain further supporting documents to specifically validate expense related outgoings. 1. Clarify the conflicts with the applicant(s). You may be required to obtain additional supporting documents to verify the commitment. Refer to Commitments policy for details of how to verify commitments 2. Amend or update the application to reflect the information found. Re-complete assessments and re-run credit decision if required. If serviceability is still met, continue with application processing. 3. Where serviceability is not met with the updated information, then clarify any conflicts with the applicant(s) and either further update or withdraw the application. 4. Enter application comments detailing any amendments made to the application and / or the outcome of all related customer discussions. This will provide an audit trail and prevent rework. 5. Enter a final comment in the application confirming the account review activity has been completed
Living Expenses:	Undisclosed: outgoing child support (maintenance) payments outgoing alimony (spousal support outgoing ongoing rent or board Undisclosed or inconsistent: Owner Occupied Primary Residence Land Tax, Body Corp and Strata Fees. Secondary Residence / Holiday Home Costs (including Insurance) dependants related living expenses such as childcare fees and education costs life, health, sickness and personal accident insurance living expenses
Other:	Potential conflicts relating to declared: marital status number of dependants employment type / mode citizenship status
¹Internal For Westpac brand, St George Bank Group and RAMS accounts are considered to be external.

2.8 Currency of Verification

Verifications completed in the consumer mortgage application remain current until any one or more of the following occur:

Any ‘loan expiry’ type occurs. Refer to ‘ Loan Expiry Types and Rules’
Advice is received that information upon which the verification was based has changed (e.g. income details change).

2.9 Pipeline Authority Policy

Purpose	This policy identifies the standards for assessing an IPA or full application under a prior (old) credit policy
Exclusions	This policy does not need to be followed if the application meets the current (new) policy.
Applicable to	Consumer mortgage applications where a borrower is seeking any of: new loan loan increase

2.9.1 Eligibility

An IPA or Full application can be assessed under prior (old) policy, if it complies with the table below.
Applications that do not meet the rules may be referred to Credit for override consideration where justified. E.g. process errors. If LMI is applicable, LMI Underwriter approval (DUA4) will be required.
If ‘non-standard’ pipeline condition/s apply to a specific policy change, they will be documented in the related change communication.

Pipeline Eligibility Rules
Scenario		Application stage		Applicable to		Can be assessed under old (prior) policy if:
	1		A ‘Review and Submit’ (RnS) decision had not previously occurred		Third Party (Broker) applications only		The application met the prior (old) credit policy, but now fails the current (new) policy; and The Apply Online (AOL) submission date was no more than 90 days prior to the policy change date; AND one of the below apply: The system input change (in the Third Party originations system or OBP) was triggered by a standard validation activity, to align input with: supporting documents provided by the finance broker at the time the application is submitted; or the internally sourced credit bureau report; or an internal system extract or enquiry (Westpac or St.George Bank Group) refer Document standards Warning: Refer to Loan Expiry Types and Rules for information regarding loan re-assessment requirements (e.g. Responsible Lending Expiry) which override this pipeline policy. OR No Material changes have occurred since the AOL submission date
	2		A ‘Review and Submit’ (RnS) decision had previously occurred		First Party and Third Party (Broker) applications		The application met the prior (old) credit policy, but now fails current (new) policy, and: A ‘Review and Submit’ (RnS) – ‘passed’ decision (approval granted manually or automatically) was no more than 90 days prior to the policy change date; and No Material changes have occurred since the RnS ‘passed’ date
	Material Changes
	For Mortgage insured and Non-mortgage insured applications:						Some examples:
	Assets are decreased						Title search indicates an asset is not owned by the borrower and is deleted
	Borrower/s or guarantor/s – are deleted or added						Additional borrower is added to application A borrower becomes a guarantor or guarantor becomes a borrower
	Credit bureau: A new decline or refer decision is received related to credit bureau default or bankruptcy						Initial application shows no defaults. At a decision run after the policy change, borrower one now has a Telstra default for $120
	Employment mode is changed						Employment mode is changed from full time to casual (even if on the same income)
	Expenses, outgoings or existing loan repayments are increased						Borrower 1 and 2 have increased rental outgo Borrower 2 has an existing loan (not the loan being processed) and the repayments are increased for that loan
	Income is reduced						Allowable social security income removed as it does not meet social security income requirements due to the age of the dependants
	Liabilities are increased (internal or external)						Applicant three has a new credit card added
	Security collateral is added or removed Applies to: Full applications IPAs where the security had been previously identified						The initial application (Full or IPA) involved the purchase of security collateral ‘A’. After receiving an unsatisfactory building inspection report, the purchase contract for ‘A’ is cancelled. The borrower offers a new Security property ‘B’.
	Security collateral is added or removed Applies to: IPA where the security had not been previously identified When the security collateral is identified and: it is unacceptable; or the IPA to Full application contains another ‘Material Change’ listed in this table						The initial application was an IPA for a loan of $400k and purchase of $500k but the actual security address had not been identified. The borrower has now found a property, and it is on the unacceptable Security Development Register list
	For Non-Mortgage insured applications:						Some examples:
	Loan amount is increased, and: the increase is greater than 10% of the original loan amount, or: the increase is not greater than 10% of the original loan amount but the increased loan amount would have failed serviceability on the prior (old) policy						The initial application was an In Principle Approval (IPA) for a loan of $400k and purchase of $500k. The borrower has now found a property costing more at $550k and requires a loan for $441k (10.25% increase). If the loan was increased to $440k this would be non- material as the increase is =10% (not greater)
	For mortgage insured applications:						Some examples:
	Loan amount is increased						Any loan amount increase
	LVR is increased due to a low valuation and the application: previously required LMI; or now requires LMI as a result of the low valuation						Application is lodged for a refinance of an existing debt. The borrower estimates that the property is valued at $500k and based on the estimate our LVR is 80%. When the valuation is completed the customer estimate was high and the actual value of the property came in at $470k. LVR has increased to 85% and now LMI is required.

2.10 Acknowledgments, confirmations and consents (for 1^st and 3^rd party channel) or Privacy Statement and other acknowledgements (for digital applications) (Consent Form)

All consumer mortgage applications require a Consent Form to be signed and dated or accepted digitally by the applicants (and guarantors, if any), prior to credit decisioning.

Also refer to Power of Attorney/Administration order where this applies to the application.

2.11 Playback Form

The Playback Form has been designed to provide the borrower's with an overview of the information captured including the credit assessment within their consumer mortgage application.
Upon submission of a consumer mortgage application for assessment (In principle approval (IPA) and Full Applications), a copy of the Playback Form is to be provided to the borrower's by the Bank.
This information is available online in the borrower’s application tracker via Internet Banking (once registered) and can also be provided physically where needed.
The playback form is also accepted as being accurate by the borrower as part of the loan offer document pack.

2.12 Power of Attorney/Administration Order

Where a Power of Attorney (POA) or Administration Order is in place the Attorney/Administrator must act in the best interests of the donor (person giving the Power of Attorney) and not in the best interests of themselves.

The Bank’s obligations under The Privacy Act advises that an Attorney cannot sign or digitally accept the Consent Forms on behalf of a borrower / donor where the borrower has capacity. Credit (or other Credit Risk authorised staff) approval is required when the Consent Form has not been signed or digitally accepted by the donor.

Brokers must also refer to Eligibility>Customers Experiencing Vulnerability and ensure that relevant criteria is applied.
The table below outlines the types of authorities that need to be considered.

Representative authority table
Type of authority	Documents that can be signed under authority	Special Conditions
General Power of Attorney (POA)	Loan Contract Variation Agreement Mortgage Agreement Guarantee Contract Loan Authority (includes direct debit, surplus contribution, additional payment etc)	Cannot be used when the donor has a cognitive impairment (refer to Eligibility>Customers Experiencing Vulnerability) POA document must: either specifically grant authority for financial matters that include to buy, sell or mortgage real estate or grant authority over all dealings without excluding real estate and/or entering loans not be relied upon where a customer has lost capacity only be considered in extenuating circumstances when the donor is not available, e.g. donor is overseas, indisposed and the Bank is unable to send documents electronically to sign. If POA is being used to sign a mortgage agreement, the POA must be registered in the same state as the security property.
Enduring Power of Attorney (POA): when borrower or guarantor has capacity / cognitive function)	Loan Contract Variation Agreement Mortgage Agreement Guarantee Contract Loan Authority (includes direct debit, surplus contribution, additional payment etc)	When the donor has a cognitive impairment, refer to next row of this table’ ‘Enduring Power of Attorney: when borrower or guarantor no longer has capacity / cognitive function’ The POA document must: either specifically grant authority for financial matters that include to buy, sell or mortgage real estate or grant authority over all dealings without excluding real estate and/or entering loans not contain a limitation that it only takes effect on loss of capacity. only be considered in extenuating circumstances when the donor is not available, e.g. donor is overseas, indisposed and the Bank is unable to send documents electronically to sign. If POA is being used to sign a mortgage agreement the POA must be registered in the same state as the security property.
Enduring Power of Attorney (POA): when borrower or guarantor no longer has capacity / cognitive function and no Administration Order has been made	Consent Form Loan Contract Variation Agreement Mortgage Agreement Guarantee Contract Loan authority (includes direct debit, surplus contribution, additional payment etc)	You will also need to refer to Eligibility>Customers Experiencing Vulnerability POA document must either specifically grant authority for financial matters that include to buy, sell or mortgage real estate or grant authority over all dealings without excluding real estate and/or entering loans. The date the POA document was signed must be prior to loss of cognitive ability. If POA is being used to sign a mortgage agreement the POA must be registered in the same state as the security property.
Administration Order: when borrower or guarantor no longer has capacity / cognitive function	Consent Form Loan Contract Variation Agreement Mortgage Agreement Guarantee Contract Loan authority (includes direct debit, surplus contribution, additional payment etc)	You will also need to refer to Eligibility>Customers Experiencing Vulnerability An Administration Order must either grant authority over all of the financial affairs of the donor or specifically grant authority over a list of financial matters that includes buying / selling property

2.13 Business Purpose Declaration

If the loan purpose established is wholly or predominantly (i.e. more than or equal to 50%) for business purposes then it is not eligible for a consumer product and must the referred to Business banking. Refer to Eligibility.
It is the Broker or Assessor's responsibility to determine whether a loan agreement is to be regulated or not under the National Credit Code. This is determined from loan purpose (not the collateral/s offered to support the loan).
As a guide the following questions may be used to assist Brokers or Assessors in determining whether the loan is regulated or not under NCC:

Is this loan in a Company Name? (If YES, never regulate.)
Will another property be the principal place of residence?
Are the loan funds to be used for any business purposes and / or investment purposes other than investment in residential property?
Are the loan funds to be used wholly or predominantly for business purpose and /or investment purposes other than investing in residential property?

Where the answer to questions 1, 3-4 inclusive is YES, the loan may be unregulated.

2.14 Loan Expiry Types and Rules

The below expiry dates apply to loan applications

Loan Expiry Type	Start Date	Expiry Occurs when	If expiry occurs
Responsible Lending	• First Apply Online (AOL) submission date (as either an IPA or Full Application), or • If the expiry period has lapsed: The first AOL resubmission date following the expiry.	Loan - where the purchase is residential property and the credit will be secured by a mortgage over the same residential collateral: The expiry period ends when the borrower has signed and returned their loan offer. The expiry period is 120 calendar days from the Start Date. In the 120-day period prior to the end date, the following needs to have occurred: reasonable inquiries regarding the customer’s requirements and objectives and financial situation reasonable steps to verify the borrower’s financial situation an unsuitability assessment for the credit contract including a credit assessment Loan – other The expiry period ends when the customer has signed and returned their loan offer. The expiry period is 90 calendar days from the Start Date. In the 90-day period prior to the end date, the following needs to have occurred: reasonable inquiries regarding the customer’s requirements and objectives and financial situation reasonable steps to verify the borrower’s financial situation an unsuitability assessment for the credit contract including a credit assessment	If the expiry period lapses, the consumer mortgage application will be forced to be edited. The assessor must advise the broker to resubmit the application in AOL . Broker must ensure that all the details provided within the application are reconfirmed with borrower prior to re-submission Upon re-submitting the application, the RL expiry period will be reset, and documents must be re-verified. Refer to Verification Verification Verification tasks must be completed and updated / new verification documentation is required where: the relevant verification document has ‘expired’, i.e. it does not meet the ‘maximum age’ policy against the new Responsible Lending Start Date Information requiring verification has changed (e.g. income has changed)
Loan Drawdown	Loan Offer generated date	For single draw loans: Loan not drawn within 180 days of the Start Date. For Progress Draw loans: Initial draw down has not occurred within 12 months of the Start Date.
Loan Drawdown	Loan Offer Expiry	The loan offer prints an expiry period of 14 days from the date of generation. The purpose of this expiry is to ensure it is actioned in a timely manner. If the loan offer is returned after 14 days but within any other expiry periods, it can be accepted without any further action.	If the RL expiry date is sooner than the loan offer 14 day expiry period, the loan offer will expire in line with the RL expiry date. The consumer mortgage application must be re-submitted and re-assessed with a new loan offer generated.

3. Comprehensive Credit Report (CCR) Mismatch

Where a mismatch is identified during manual review of the report, further investigation and action is required. For specific scenarios, refer to the table below:

Scenario		Action	Additional requirements
1	The applicant advises the facility has been closed but the CCR still shows the account as open.	Evidence that the account has been closed must be obtained prior to formal approval. Refer to Serviceability assessment > Rules >Amended current commitment Note: If unable to obtain evidence of closure, then the commitment is to be included in the serviceability assessment	Enter application comments detailing the outcome of all related customer discussions
2	The applicant advises the facility has been paid back, but the CCR shows the account is still open as they have not formally closed the facility	Further enquires are to be made with the applicant: If the applicant wants to retain the facility, then the commitment is to be included in the serviceability assessment. Verify the details of the commitment as per Commitments > Verifying customer commitments If the applicant does not want to retain the facility, they will need to provide evidence the facility has been closed as per Scenario 1	Enter application comments detailing the outcome of all related customer discussions
3	The CCR shows an open facility that the borrower forgot and did not declare	Where the CCR contains: a maximum of one undisclosed / undeclared debt (facility) per application and the debt is either: a Credit Card or an Overdraft (unsecured / non-mortgage) and the current months repayment history status* displays a 0 (zero) refer to and follow the additional requirements. * Repayment history on CCR appears from right to left. Right = current month at the time the report was generated (most recent month) to oldest month (being month 24). For more information about repayment history status refer to Commitments policy > On CCR – Repayment history criteria	For the previously undisclosed / undeclared commitment: Verify the details of the commitment as per Commitments > Verifying customer commitments Re-complete serviceability assessments as per Serviceability Assessment > Commitments > Serviceability repayment amount Re-run credit decision if required Where serviceability is met with the additional commitment included, proceed with application processing. Note: No referral to the applicant is required. Inclusion of the additional commitment will result in a more conservative serviceability assessment outcome. If serviceability is not met with the additional commitment included further enquires are to be made with the applicant: If the applicant wants to retain the facility, then the commitment is to be included in the serviceability assessment (refer to Scenario 2 > Additional requirements) If the applicant does not want to retain the facility, they will need to provide evidence the facility has been closed. Evidence must be obtained prior to formal approval (refer to Scenario 1 Action and Additional requirements)
3		Where the CCR contains: > 1 undisclosed / undeclared Credit card or Overdraft (unsecured / non-mortgage); or The Credit Card or an Overdraft (unsecured / non-mortgage) current months repayment history status does not display a 0 (zero); or The undisclosed / undeclared debt (facility) is not a credit card or overdraft (unsecured / non-mortgage) Further enquires are to be made with the applicant: If the applicant wants to retain the facility, then the commitment is to be included in the serviceability assessment. Verify the details of the commitment as per Commitments > Verifying customer commitments If the applicant does not want to retain the facility, they will need to provide evidence the facility has been closed as per Scenario 1	Record in application notes the outcome of all related customer discussions
4	The CCR evidences a lower limit than the value entered into the application / used for the monthly repayment calculation.	Where the applicant declared limit is > the CCR limit and serviceability is able to be demonstrated based on the higher customer declared limit. This is an allowable variance as per the Commitments policy > Allowable Variances. You may rest on the customer declared limit. Note: Applicant may have recently increased the limit and it is not yet evident on the CCR.
5	The CCR evidences a lower limit than the value entered into the application / used for the monthly repayment calculation.	Where the applicant declared limit is > the CCR limit and serviceability is not able to be demonstrated based on the higher customer declared limit. Unable to rest on the CCR limit Obtain additional supporting documentation to verify the actual limit.	Enter application comments detailing the outcome of all related customer discussions. Verify the details of the commitment as per: Commitments Serviceability assessment > Assessing commitments > payment amount used for serviceability Amend or update the application to reflect the verified position. Re-complete serviceability assessments, and re-run credit decision if required
6	The CCR evidences a higher limit than the value entered into the application / used for the monthly repayment calculation.	Where the applicant declared limit is < the CCR limit and serviceability is able to be demonstrated based on the higher CCR limit This is an allowable variance as per the Commitments policy > Allowable Variances. You may rest on the CCR limit.
7	The CCR evidences a higher limit than the value entered into the application / used for the monthly repayment calculation.	Where the applicant declared limit is < the CCR limit and serviceability is not able to be demonstrated based on the higher CCR limit. Unable to rest on applicant declared limit or CCR limit Obtain additional supporting documentation to verify the actual limit. Note: applicant may have recently decreased the limit and it is not yet evident on credit bureau report.	Enter application comments detailing the outcome of all related customer discussions. Verify the details of the commitment as per: Commitments Serviceability assessment > Assessing commitments > payment amount used for serviceability Amend or update the application to reflect the verified position. Re-complete serviceability assessments, and re-run credit decision if required
8	The applicant declares a facility but it does not appear on the CCR as an open facility.	Not all financial institutions participate in CCR and some facility types are not supported for positive reporting Obtain an alternate supporting documentation to verify the customer declared commitment	Verify the details of the commitment as per: Commitments Serviceability assessment > Assessing commitments > payment amount used for serviceability
9	The CCR shows the account as closed. The applicant continues to make payments to the account.	Confirm with the applicant why they continue to make payments to the account. For example, a credit card may have been closed to prevent accidental redraw of available funds while the applicant is repaying the debt.	Verify the details of the commitment as per: Commitments Serviceability assessment > Assessing commitments > payment amount used for serviceability
10	Facility is unheard of – applicant denies any knowledge of facility	Application cannot proceed until issue is resolved	To query the facility and have the bureau content amended: The applicant may choose to make direct contact with the credit provider
11	The customer disputes the repayment history on the CCR or The history on the CCR is inconsistent with repayment history on another supporting document and results in the facility not demonstrating satisfactory repayment history requirements	Application cannot proceed until issue is resolved	To query the facility and have the bureau content amended: The applicant may choose to make direct contact with the credit provider

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	8 November 2021	Links updated
3	21 November 2021	Removed duplicated content located in 3.09 Eligibility > 3.2 Identifying a business banking client
4	22 May 2022	Change 1 Section ‘Full Application date’ renamed as ‘Responsible Lending Start Date’ Change to measure the maximum age of verification documents from the ‘Responsible Lending Start Date’ (previously ‘Full Application date’) Section ‘Loan Expiry Types and Rules’: updated to include rules relating to the ‘Responsible Lending Start Date’ updated to include rules relating to action required if expiry occurs reformatting of existing content to improve clarity Change 2 Section ‘Conditional Approval Validity period’: renamed ‘In Principle Approval (IPA)/ ‘Conditional Approval Validity period’-clarification only content updated to include references to ‘in principle approval’ -clarification only Change 3 Added sections ‘In Principle Approval’ and ‘Full Application’ to provide an overview of these application types and their requirements--clarification only Change 4 Reformatting of existing content to improve clarity
5	21 August 2022	Change 1 Policy Standards and Procedure rewrite Change 2 Updated references to the ‘Minimum Document Standards Matrix’. The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter. Existing references have been updated to point to the ‘Document Standards’ chapter
6	21 May 2023	Change 1 Added new section ‘Validation of information provided by the customer’. The associated policy rules for this section have been transitioned from the (now decommissioned) ’03.26 Validation of information provided by the customer’ chapter. As part of this transition: Existing policy rules were re-written to: re-format and re-wording of policy to improve clarity (with no change to policy) The existing policy rules ‘What to look for’ were changed: Change from looking for: property related expenses (such as land tax, rates, strata fees, utilities and insurance) for primary and secondary residences, and investment properties Change to looking for: Owner Occupied Primary Residence Land Tax, Body Corp and Strata Fees. Secondary Residence / Holiday Home Costs (including Insurance)
7	2 July 2023	Change 1 Housekeeping change only- correct spelling of dependant vs dependent Change 2 Added new section ‘Pipeline Authority Policy’. The associated policy rules for this section have been transitioned from the (now decommissioned) ’04.05 Pipeline Authority Policy’ chapter. As part of this transition: Existing policy rules were re-written to: re-format and re-wording of policy to improve clarity (with no change to policy)

Rate this policy Submitting... Thank you for your feedback! There was an error with your submission. Please try again.	Published Date Published Date 02/07/2023

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03.12 Living Expenses

Policy ID

03.12

Policy Name

Living Expenses

Policy Content

1. About this policy
1.1 Why this policy
2. Rules you must apply
2.1 Capturing customer declared living expenses
2.2 Reducing living expenses
2.3 Conflicting information
2.4 Living expenses compared to HEM
2.5 Living expenses not compared to HEM
2.6 Factors affecting HEM / living expenses
2.7 Apportioning declared living expenses in loan application
2.8 Definition of a dependant
2.9 Rental expenses from a property rented on a short term basis

1. About this policy

1.1 Why this policy

Purpose	Living expenses materially affect the ability of a residential mortgage borrower to meet repayments due on a loan and are a key component of a serviceability assessment. The declared living expenses are used by the Bank as part of the unsuitability assessment as required under our Responsible Lending obligations. This policy identifies the standards for: enquiring about and capturing living expense information for each borrower and income guarantor that is contractually bound to repay the loan
Applicable to	Consumer mortgage applications where a borrower is seeking any of: new loan loan increase servicing / variation activity requiring a serviceability assessment
Policy exclusion	This policy does not apply to a Bridging ICAP loan with no end debt
Reading this policy	Unless specifically stipulated otherwise, the content applies to both non-mortgage insured (non-MI) and mortgage insured (MI) consumer mortgage loan applications
Associated policies	You may also need to refer to other lending policy rules, including but not limited to: Commitments Guarantees Serviceability assessment Validation of information provided by the customer If the application requires mortgage insurance, where required refer to: Lenders Mortgage Insurance

2. Rules you must apply

2.1 Capturing customer declared living expenses

It is critical that an appropriate level of enquiry is made, to ensure that an accurate view of the declared household living expenses are captured.
Refer to Glossary for definition of a ‘household’
Living expenses must be captured and entered according to the set expense category. It is not acceptable to 'bundle' across expense categories.
Borrowers and income guarantors are required to declare all ongoing household living expenses that:

are in place as at time of the application, and
will be in place after settlement of their loan

Brokers are to assist by providing a description of each expense category to ensure the declared responses clearly align to our requirements. Refer to Expense category tables in Living Expenses compared to HEM and Living Expenses not compared to HEM

Brokers cannot suggest a value on the applicant's behalf, except when rental income used in the serviceability assessment is rental income (in AUD) from a property rented on a short term basis.

Refer to:
- Rental expenses from a property rented on a short term basis , and
- Verifying Income > Supplementary income > Rental income (in AUD) Rent received on a short term basis

2.2 Reducing living expenses

We acknowledge that a customer may change their spending behaviour when they have a new mortgage repayment obligation or following a change in circumstances (e.g. children moving out of parent's house).

We accept that such a change often involves a reduction in discretionary (non-essential) expenses such as recreation, entertainment, clothing, personal care and groceries. It is less likely that a customer can easily reduce expenses that are more stable by nature such as insurances, property-related costs, utilities, education and telephone. Refer to Expense category tables in Living Expenses compared to HEM and Living Expenses not compared to HEM to identify discretionary v’s non-discretionary expense types.

Where the customer has told us that they are prepared to reasonably change their lifestyle to reduce living expenses, we may adjust customer declared expense amounts in the loan assessment system provided:

Broker has had a robust discussion with customer around their living expenses patterns; and
The reduction appears reasonable; and
Overall comments are recorded in ApplyOnline detailing:
- the customer discussion
- what expenses have been adjusted and by how much
- the reasons why the reductions were deemed acceptable by the Broker.

The customer declared amount cannot be accepted for any outgoing child support, alimony, rent / board (post settlement). The amount of the payment must be verified, for further information refer to Commitments policy

2.3 Conflicting information

After the declared living expenses have been captured, we may need to make further enquiries if

during the assessment of the application we identify information which conflicts with the declared expenses as per Loan Application and Approval > Validation of information provided by the customer policy
OBP referral rule 'Customer Declared Expenses being < 70% of HEM’ has been triggered.

2.4 Living expenses compared to HEM

These living living expense:

categories will be compared to the HEM value; and
- the higher of the declared expenses or HEM will be used in the serviceability calculation
are used to calculate the expense to net [discounted] HEM ratio at application level. This is used to assist in:
understanding the level of expenses; and
identifying where they are materially different (higher or lower) to the Household Expenditure Measure . Refer Serviceability assessment for HEM values.

Applications where the declared living expenses are assessed as materially low in relation to their income and insufficient to maintain a reasonable standard of living will require further detailed commentary and mitigation before approval can be considered.

Brokers must comply with the ’Commentary required’ rules detailed in the table:

Expense Category	Description	Commentary required?	Non-discretionary expense?
Clothing and Personal Care (including footwear, cosmetics, etc.)	Clothing, footwear, cosmetics, personal care	Yes, when the expense is $0	No
Groceries	Typical supermarket shop for groceries including food and toiletries	Yes, when the expense is $0	No
Medical and Health (Excluding Health Insurance)	Medical and health costs including doctor, dental, optical and pharmaceutical etc. (excluding health insurance which is categorised under 'Insurance (Life, Health, Sickness and Personal Accident)')	Yes, when the expense is $0	No
Childcare (including nannies and day care)	Childcare including nannies Note: Child Care costs to be entered net of the Child Care Subsidy	Yes, when the expense is $0 and the borrower has declared a dependant under the age of 6 years (i.e. 5 years old or younger)	Yes
Public or Government Primary & Secondary Education Costs	Education fees, books, uniforms and associated costs for public schooling (preschool, primary or secondary)	Yes, when expense is $0 and the borrower: has declared a dependant between the ages of 5-18 years and Private schooling & Tuition expense category is 0 and no comment provided	Yes
Higher Education & Vocational Training Costs (excluding Study & Training Support Loans - STSL)	Fees, accommodation, books and associated costs for higher education (tertiary) and vocational training e.g. university, TAFE, business college, drama, music, dance (excluding STSL / HECS) For Study and training support loans (STSL) rules, refer to: Commitments > Confirm the details of the commitment > Other liability types Serviceability Assessment > Serviceability Repayment Amount	Yes, when the expense is $0	Yes
Insurance (Excluding Life, Health, Sickness and Personal Accident)	Insurance costs such as personal belongings, travel and ambulance insurance, as well as any compulsory insurance of motor vehicles (combined insurance and registration) other than recreation vehicles. Excludes property related insurance costs (building, contents etc) as well as life, health, sickness and personal accident insurance.	Yes, when the expense is $0	No
Telephone, internet, pay TV and media streaming subscriptions	Telephone accounts (home and mobile), internet, pay TV and media streaming subscriptions	Yes, when the expense is $0	No
Transport (including public transport, car usage, parking, tolls etc.)	Public transport and motor vehicle running costs including fuel, servicing, parking and tolls (excluding motor vehicle insurance which is categorised under insurance). Note: Where there is a salary sacrifice arrangement, the vehicle running expenses are to be included in the declared expenses	Yes, when the expense is $0	No
Recreation and Entertainment	Recreation and entertainment including alcohol, tobacco, gambling, restaurants, membership fees, loan account fees not covered by another specific category (excludes Short Term Buy Now Pay Later facilities), pet care, domestic holidays	Yes, when the expense is $0	No
Primary Residence Costs (Including Insurance)	Housing and property expenses associated with the borrower’s primary residence, either owned or rented. Includes rates, levies, repairs and maintenance, insurance (building, contents etc), loan account fees (new and existing), all other utilities and other household costs for fixtures and fittings (excluding land tax, body corporate and strata fees, telephone, internet and pay TV)	Yes, when the expense is $0	Yes

2.5 Living expenses not compared to HEM

These expense categories:

will not be compared to the HEM value
will be totalled and added as an outgo in ApplyOnline, except for:
- Investment Property costs (Including Insurance) - Refer to 'Additional conditions’ for this category

Brokers must comply with ’Commentary required’ and ‘Additional conditions’ rules detailed in the table:

Expense Category	Description	Commentary required?	Non-discretionary expense ?	Additional conditions
Owner Occupied Primary Residence Land Tax, Body Corp & Strata Fees	Land tax, body corporate and strata fees on owner-occupied principal place of residence (excluding investment properties, secondary residences, and properties maintained for other purposes such as holiday properties or residences maintained for parents or children)	Yes, when the expense is $0 and the borrower: has an existing owner occupied property and/or is purchasing or obtaining ownership of an owner occupied property as part of the application	Yes
Secondary Residence / Holiday Home Costs (Including Insurance)	Costs associated with any secondary residences, either rented or owned for non-investment purposes, such as: a holiday property that is not rented to generate income, a property that family members (parents or children) are allowed to live in rent-free. Vacant land Includes rates, taxes, levies, body corporate and strata fees, repairs and maintenance, insurance (building, contents etc), associated loan account fees (new and existing), all other utilities and other household costs for fixtures and fittings Note: Where a property does not receive rental income, or rental income is not relied on and not verified, or involves a scenario where negative gearing is excluded under policy (refer Serviceability Assessment > Rental income tax deductions for Australian investment properties (Negative Gearing) then: the property should be loaded in ApplyOnline and the associated Living Expenses are to be captured under 'Secondary Residence / Holiday Home Costs (including Insurance)'.	Yes, when the expense is $0 and the borrower: has an existing owner occupied Secondary residence and / or is purchasing or obtaining ownership of an owner occupied Secondary Residence as part of the application	Yes
Insurance (Life, Health, Sickness and Personal Accident)	Hospital, medical and dental health insurance, sickness and personal accident insurance, life insurance (paid for by the customer outside of superannuation)	Yes, when the expense is $0	Yes
Private Schooling & Tuition Costs	Tuition fees, school fees, sports fees, books, uniforms and associated costs for private schooling, including independent schools (Catholic or non-Catholic), private tuition (such as Kumon and Kip McGrath) and compulsory age kindergarten / reception / pre-primary / prep	Yes, when expense is $0 and the borrower: has declared a dependant between the ages of 5-18 years and Public or Government Education expense category is 0 and no comment provided	Yes
Other regular or recurring expenses	Any other regular or recurring expenses not covered by specific categories in: this ‘Living Expense not compared to HEM’ table; or ‘Living expenses compared to HEM’ table . E.g.: after tax or post tax superannuation deductions from salary / wage overseas holidays, purchase, insurance and maintenance of recreation vehicles (caravan, boat etc), cleaning or gardening services, etc.	No	No	Care should be taken, particularly if the declared expense is a HEM comparable expense. Incorrect categorisation may result in a higher living expense figure being used in the serviceability assessment.
Child Support / Alimony	Outgoing child support (maintenance) Outgoing alimony (spousal support) The amount of any outgoing child support and / or alimony payment must be verified. Verification requirements are detailed in Commitments policy > Confirm details of the commitment.	No	Yes	Verification required - refer to Commitments policy
Rent / Board (post settlement)	Rental expense that will be paid post settlement of the loan The amount of any outgoing rent or board (post settlement) payment must be verified. Verification requirements are detailed in Commitments policy > Confirm details of the commitment.	Yes, when system indicates borrower will be Renting / Boarding post settlement and the amount declared is < $650	Yes	Verification required - refer to Commitments policy
Investment Property Costs (Including Insurance)	Housing and property expenses on investment property including rates, taxes, levies, body corporate and strata fees, repairs and maintenance, insurance (building, contents etc), loan account fees (new and existing), all other utilities and household costs for fixtures and fittings Where a property does not receive rental income, or rental income is not relied on and not verified, or involves a scenario where negative gearing is excluded under policy (refer Serviceability Assessment > Rental income tax deductions for Australian investment properties (Negative Gearing) then: the property should be loaded in ApplyOnline; and the associated Living Expenses are to be captured under 'Secondary Residence / Holiday Home Costs (including Insurance)'. Where the loan application has been assessed as Self-employed, rental income and expenses must be captured and assessed as per - Fully verified self-employed assessment and Fast Track self-employed assessment policies Self-employed Applicants policy > Fast track self-employed assessment; or Self-employed Applicants policy > Rental income - fully verified self-employed assessment	Yes, when the expense is $0 and the borrower: has an existing investment property and / or is purchasing or obtaining ownership of an investment property as part of the application Note: Where the same property is an investment property for one borrower but an owner occupied property for another borrower, ensure that the expense is captured under the relevant category for each borrower and commentary entered.	Yes	Investment Property Costs (Including Insurance) are offset against rental income Investment Property Costs (Including Insurance) must be captured as per each applicant's exact expenses across all investment properties in which they have an ownership must be captured. Note: When the applicant and non-applicant are spouse residing at the same address, Apportioned household expenses and shared commitments - Spousal same household option may apply. Refer to Serviceability Assessment policy

2.6 Factors affecting HEM / living expenses

Other factors which may impact living expenses are:

post settlement postcode
- Where an In Principle Approval application is submitted, the post settlement postcode is to be captured as accurately as possible
- The application must reflect the actual post settlement postcode for formal approval.
number of dependants - refer to Definition of a Dependant

It is a mandatory to capture these details within the loan assessment system.

2.7 Apportioning declared living expenses in loan application

The table below details whether household living expenses can be apportioned, according to how the spouse is associated with the loan application

Application Type	Apportioning Rules	Additional information
Spouse is also a borrower	Apportioning the household living expenses against these parties is not restricted	Restriction applies to apportioning 'Investment Property Costs (Including Insurance)'. Refer to Investment Property Costs (Including Insurance) > Additional conditions
Spousal - Security Guarantee	Refer to Serviceability Assessment > Apportioned household expenses and shared commitments - Spousal same household.
Spouse is not a borrower or guarantor

2.14 Definition of a Dependant

A dependant is defined as:

a child under the age of 18 years; or
a child aged 18 years or older who lives with the applicant, receives no income from government benefits, employment or other income sources, and is totally financially reliant on the applicant (e.g. A full time unemployed student, or a child with a disability living at home permanently)

where the applicant has legal responsibility for the care and welfare of the child, on either a full or part time basis. Note: The child under the age of 18 years may or may not reside with the applicant.

Unborn children are not considered dependants. Variance to this rule where Serviceability Assessment > Parental leave – use of ‘return to work’ income’ policy is applied.

Any additional expenses for children over the age of 18 living at home need to be captured in the living expenses discussion with the customer.

If applicants are expecting to add to their family, this should be identified during completion of Responsible Lending requirements by way of question: Do you expect any significant changes to your financial situation over the next 3 years that would adversely impact your ability to meet your repayments? Refer to Serviceability Assessment

Where the child does not reside with the applicant it is acceptable to use an outgoing child support payment in place of including the child as a dependant for serviceability purposes. If no child support is paid or child support is paid and the child resides with the applicant the child must be included as a dependant for serviceability purposes. Any shared custody arrangements should be clearly explained in the application

The amount of any outgoing child support payment must be verified for further information refer to Commitments policy

2.15 Rental expenses from a property rented on a short term basis

When rental income used in the serviceability assessment is rental income (in AUD) From a property rented on a short term basis and this property was rented for the full 52 weeks of the year. The expenses declared on the rental schedule other that interest, depreciation and once off capital expenses must be used. Refer to Verifying Income > Supplementary income > Rental income (in AUD) Rent received on a short term basis

Where the short-term rental property has not been rented for the full 52 weeks of the year, expenses incurred when the property is not rented are to be entered into customer expenses either as an owner occupied primary or owner-occupied secondary expenses. The lender should discuss with the customer to determine whether the property is owner occupied primary or owner occupied secondary and document accordingly.

If the property is owner-occupied and has a separate area of occupancy (granny flat) being used for short term rent, the owner-occupied portion of expenses is to be separated from the investment portion. Like above, the investment portion can be determined from the rental schedule in the tax return and the owner-occupied portion can be determined through a customer conversation.

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	8 November 2021	Links updated
3	21 November 2021	Change 1 Expense Category table > Other regular or recurring expenses > When is commentary required column Old No commentary required and ‘N/A’ or similar note may be used New* No commentary required (System has been updated and a comment of N/A is no longer necessary to allow the application to be progressed. Field can be blank)
4	20 February 2022	Addition to content in section 2.12 Expense Category table > Expense Category ‘Other’ Description column: after tax or post tax superannuation deductions from salary / wage This information has been included in line with the update to Verifying Income policy to reference ‘after tax or post tax’ deductions on a payslip.
5	22 May 2022	Change 1 Updated section ‘ Capturing living expenses - Guarantors / Guarantee ‘ to specify that for ‘Shared Equity Guarantee’ type, the guarantor’s expenses do not need to be captured as they are non-spousal guarantors and their income is not used for serviceability Change 2 Section 2.3 Capturing customer declared living expenses – applicant Updated content relating to Validation of information provided by the customer policy to show renamed sub-chapters Old If Lender assist tool can-not be used, refer to Validation of information provided by the customer policy > scrutiny activity - tasks. New If Lender assist tool can-not be used, refer to Validation of information provided by the customer policy: Validation of information Document review – what to look for Change 3 Change to content in section 2.6 Conflicting information New After the customer’s declared living expenses have been captured, we may need to make further enquiries with the applicant if: during the assessment of the application we identify information which conflicts with the customer declared non-discretionary expenses. The conflict may be identified using data from Lender Assist where applicable) or other supporting documents provided by the applicant(s). Refer to and follow the requirements as per Validation of information provided by the customer policy > Document review – what to look for (table) > Any inconsistencies or omissions in customer declared expenses where the expense type is non-discretionary Change 4 New content added to section 2.12 Expense Category Table Items marked with ^ are non-discretionary expense categories
6	17 July 2022	Update to section 2.15 Definition of a Dependant Old Unborn children are not considered dependants. New Unborn children are not considered dependants. Variance to this rule where Serviceability Assessment > Parental leave – use of ‘return to work’ income’ policy is applied.
7	2 October 2022	Change 1 In the “Capturing customer declared living expenses – applicant” section under “Brokers cannot suggest a value on the applicant's behalf, except:” the following new dot points have been added When rental income used in the serviceability assessment is rental income (in AUD) from a property rented on a short term basis. If rental expenses relate to a property rented on a short term basis refer to: Rental expenses from a property rented on a short term basis. Refer to Verifying Income > Supplementary income > Rental income (in AUD) Rent received on a short term basis Added the following new section 2.16 Rental expenses from a property rented on a short term basis When rental income used in the serviceability assessment is rental income (in AUD) From a property rented on a short term basis and this property was rented for the full 52 weeks of the year. The expenses declared on the rental schedule other that interest, depreciation and once off capital expenses must be used. Refer to Verifying Income > Supplementary income > Rental income (in AUD) Rent received on a short term basis Where the short-term rental property has not been rented for the full 52 weeks of the year, expenses incurred when the property is not rented are to be entered into customer expenses either as an owner occupied primary or owner-occupied secondary expenses. The lender should discuss with the customer to determine whether the property is owner occupied primary or owner occupied secondary and document accordingly. If the property is owner-occupied and has a separate area of occupancy (granny flat) being used for short term rent, the owner-occupied portion of expenses is to be separated from the investment portion. Like above, the investment portion can be determined from the rental schedule in the tax return and the owner-occupied portion can be determined through a customer conversation Change 2 Updated section ‘Why this policy’: Included words and link highlighted in bold Any servicing (variation) activity requiring a serviceability assessment
8	20 November 2022	Change 1 Content moved section 2.3 Capturing customer declared living expenses – applicant Old wording Brokers cannot suggest a value on the applicant's behalf, except: When rental income used in the serviceability assessment is rental income (in AUD) from a property rented on a short term basis. Refer to Verifying Income > Supplementary income > Rental income (in AUD) Rent received on a short term basis New wording When rental income used in the serviceability assessment is rental income (in AUD) from a property rented on a short term basis. Refer to: Rental expenses from a property rented on a short term basis , and Verifying Income > Supplementary income > Rental income (in AUD) Rent received on a short term basis Change 2 Content added to 2.5 Reducing living expenses Old wording We accept that such a change often involves a reduction in discretionary (non-essential) expenses such as recreation, entertainment, clothing, personal care and groceries. It is less likely that a customer can easily reduce expenses that are more stable by nature such as insurances, property-related costs, utilities, education and telephone. New wording We accept that such a change often involves a reduction in discretionary (non-essential) expenses such as recreation, entertainment, clothing, personal care and groceries. It is less likely that a customer can easily reduce expenses that are more stable by nature such as insurances, property-related costs, utilities, education and telephone. Refer to Expense category table to identify discretionary v’s non-discretionary expense types. Additional content The customer declared amount cannot be accepted for any outgoing child support, alimony, rent / board (post settlement). The amount of the payment must be verified, for further information refer to Commitments policy Change 3 New content added to Section 2.12 Expense Category Table Expense category > Child Support / Alimony > Column ‘Description’ Old wording Outgoing child support Outgoing alimony (spousal support) New wording Outgoing child support (maintenance) Outgoing alimony (spousal support) The amount of any outgoing child support and / or alimony payment must be verified. Verification requirements are detailed in Commitments policy > Confirm details of the commitment. Expense category > Higher Education & Vocational Training Costs (excluding Study & Training Support Loans – STSL) > column ‘Description’ Old wording Fees, accommodation, books and associated costs for higher education (tertiary) and vocational training e.g. university, TAFE, business college, drama, music, dance (excluding STSL / HECS) New wording Fees, accommodation, books and associated costs for higher education (tertiary) and vocational training e.g. university, TAFE, business college, drama, music, dance (excluding STSL / HECS) For Study and training support loans (STSL) rules, refer to: Commitments > Confirm the details of the commitment > Other liability types Serviceability Assessment > Serviceability Repayment Amount Expense category > Rent / Board (post settlement) > Column ‘Description Old wording Rental expense that will be paid post settlement of the loan New wording The amount of any outgoing rent or board (post settlement) payment must be verified. Verification requirements are detailed in Commitments policy > Confirm details of the commitment. Additional worded included below table: ¹ These non-discretionary expenses are required to be verified. Verification requirements are detailed in Commitments policy > Confirm details of the commitment Change 4 Wording update in section 2.13.1 Apportioning ‘Investment Property Costs (including insurance)’ Old wording The applicant's exact expenses across all investment properties in which they have an ownership must be captured. For example: A husband and wife applying in joint names own an investment property 60 / 40 and the total property expense is $1,000, they would need to declare $600 and $400 respectively as their individual Investment Property costs. An applicant applying in their sole name owns an investment property 50 / 50 with a non-applicant, where the total property expense is $1,000 and the owners also share the expenses 50 / 50, the applicant would need to declare $500 as their individual Investment Property costs. Note: When the applicant and non-applicant are spouse residing at the same address, apportioned household expense option may apply. Refer to Serviceability Assessment > Apportioned household expenses New wording Investment Property Costs (Including Insurance) are offset against rental income Investment Property Costs (Including Insurance) must be captured as per each applicant's exact expenses across all investment properties in which they have an ownership. For example: A husband and wife applying in joint names own an investment property 60 / 40 and the total property expense is $1,000, they would need to declare $600 and $400 respectively as their individual Investment Property costs. An applicant applying in their sole name owns an investment property 50 / 50 with a non-applicant, where the total property expense is $1,000 and the owners also share the expenses 50 / 50, the applicant would need to declare $500 as their individual Investment Property costs. Note: When the applicant and non-applicant are spouse residing at the same address, apportioned household expense option may apply. Refer to Serviceability Assessment > Apportioned household expenses Change 5 Content has been deleted, impacted section 2.14 Verifying outgoing child support, alimony, rent or board (post settlement) Deleted The amount of any outgoing child support, alimony, rent or board (post settlement) payment must be verified. Verification requirements are detailed in Commitments policy > Confirm details of the commitment. (The above deleted content can now be found in section 2.12 Expense Category Table) As a result of the deleted of this section, the remaining sections have been renumbered. Change 6 Content has been deleted, impacted section 3.1 Expense categories – Investment Property Costs (including insurance) Deleted Investment Property Costs (Including Insurance) are offset against rental income Investment Property Costs (Including Insurance) must be captured as each applicant's exact expenses across all investment properties in which they have an ownership. For example: A husband and wife applying in joint names own an investment property 60 / 40 and the total property expense is $1,000, they would need to declare $600 and $400 respectively as their individual Investment Property costs. An applicant applying in their sole name owns an investment property 50 / 50 with a non-applicant, where the total property expense is $1,000 and the owners also share the expenses 50 / 50, the applicant would need to declare $500 as their individual Investment Property costs. Note: When the applicant and non-applicant are spouse residing at the same address, Apportioned household expense option may apply. Refer to Serviceability Assessment > Apportioned household expenses. (the section was primarily a duplication of 2.13.1 Apportioning ‘investment property costs (including insurance)'
9	24 April 2023	Change references throughout policy from ‘Apportioned household expenses’ to ‘Apportioned household expenses and shared commitments – Spousal same household
10	21 May 2023	Change 1 Policy re-write to: re-format and re-wording of policy to improve readability Change 2 Throughout document, redirected references and links from ‘Validation of information provided by the customer’ policy chapter to ‘Loan Application and Approval > Validation of information provided by the customer’. Housekeeping change only Change 3 Under section ‘Conflicting information’ policy changed: Old wording After the customer's declared living expenses have been captured, we may need to make further enquiries with the applicant if: during the assessment of the application we identify information which conflicts with the customer declared non-discretionary expenses. The conflict may be identified using data from Lender Assist where applicable or other supporting documents provided by the applicant(s). Refer to and follow the requirements as per Validation of information provided by the customer policy > Document review – what to look for (table) > Any inconsistencies or omissions in customer declared expenses where the expense type is non-discretionary; or New wording After the declared living expenses have been captured, we may need to make further enquiries if : during the assessment of the application we identify information which conflicts with the declared expenses as per Loan Application and Approval > Validation of information provided by the customer policy

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03.13 Lending to Non-Australian Citizens

Policy ID

03.13

Policy Name

Lending to Non-Australian Citizens

Policy Content

1. About this policy
1.1 Why this policy
2. Rules you must apply
2.1 Establishing citizenship and residency
2.2 Migrant lending
2.3 Eligibility criteria
2.4 Income and employment verification
2.5 Own contribution validation
2.6 Document translation
2.7 Applications with multiple applicants and varying visa types, citizenship or residency status
2.8 Approval from foreign investment review board (FIRB)
2.9 Visa matrix and Applicant via Resident Type Matrix Overview
2.10 Visa Matrix
2.10.1 Acceptable Visas
2.10.2 Unacceptable Visas
2.11 Applicant via Resident type matrix
2.12 Non-Resident Lending
3. Process to follow
3.1 Migrant lending package application process
3.2 Evidencing migrant visa

1. About this policy

1.1 Why this policy

This policy will help you identify an applicant’s residency status and determine if the application for consumer mortgage lending can proceed.

2. Rules you must apply

2.1 Establishing citizenship and residency status

A customer’s citizenship, residency or non-residency status must be established at initial application stage for all consumer mortgage loans.
For applicants who are:

Australian citizens who reside in Australia, or out of Australia on either a temporary or permanent basis (i.e. Australian expat), refer to Eligibility policy > Australian Citizen residency status
New Zealand citizens, or they hold a permanent or temporary residency visa issued by the Australian government, refer to Migrant Lending

Where the above scenarios do not apply to the applicant, refer Non-Resident lending , this will include applicants who:

are not an Australian or New Zealand citizen, or
do not hold either a permanent or temporary residency visa issued by the Australian government, or
hold a temporary visa issued b the Australian government, but reside out of Australia

2.2 Migrant lending

A migrant is defined as an individual that has been granted an Australian government residence visa (temporary or permanent) for entry into Australia, i.e.:

A permanent residence visa allows a person unrestricted working rights in Australia and they can remain in Australia indefinitely.
A temporary residence visa allows a person to live in Australia for a limited time only and they may have restricted working rights.

Eligible migrant applicants may be able to access consumer mortgage loan lending for owner occupied or investment purpose, refer to :

Eligibility criteria
Loan to Value Ratio (LVR) > LVR by borrower type and income source for maximum allowable LVR
Applicant via Resident Type matrix for any additional conditions.

Normal credit underwriting standards including serviceability and verification rules apply.
If the loan application requires and is acceptable for mortgage insurance, refer to Lenders Mortgage Insurance where required.

2.3 Eligibility criteria

Migrant lending policy is available to applicants that meet the following criteria :

The applicant’s permanent or temporary visa must be listed as an acceptable migrant visa type and number within the Acceptable Visa matrix
Applicant’s employment status and income are compliant with the Acceptable Visa matrix
A copy of the migrant’s passport and evidence of Australian visa details (excluding the Australian visa number) must be obtained and held on file. Where the applicant:
- Does not hold a passport( e.g. a refugee may only hold a Protection visa subclass 866), the application may be referred to Credit for further consideration.
- Has an expired passport but holds a permanent residence visa and resides in Australia, a copy of the expired passport, supported by a copy of the current visa is acceptable.
Certain migrant visa holders may not have access to all products and reference must be made to the Applicant via Resident Type matrix prior to providing a product.
Applicants who hold a:
- Permanent visa but reside overseas and are purchasing an investment property must have a minimum of 12 months remaining on their Australian Visa (unless the visa does not have an expiry date).
- Temporary visa must have a minimum of 12 months remaining on their Australian Visa, for a:
  - Non-mortgage insured loan, a visa with no expiry date is considered to have met the minimum 12 month rule.
  - Mortgage insured loan, the Mortgage Insurer may consider any referral on a case-by-case basis, outside of the above, with supporting commentary (i.e. visa does not have an expiry date for visa 309 and 820 with confirmation of current status)
    Note: Where the application is mortgage insured, the Visa must be acceptable to the Mortgage Insurer, refer Applicant via Resident Type Matrix

2.4 Income and employment verification

Where the application includes foreign income, or Australian Dollar (AUD) income from foreign PAYG employment, refer to and follow the requirements in:

Verifying Income > Foreign income and / or employment
Loan to Value Ratio (LVR) policy > LVR by borrower type and income source and
Applicant via Resident Type matrix

2.5 Own contribution validation

Funds to complete or own contribution is generally considered to be the shortfall between the purchase price (inclusive of legal and stamp duty) and the loan being provided by the Bank.

Some migrant visa holders must provide evidence of their funds to complete / own contribution via account statements, to confirm that the source of funds is from a genuine financial institution (e.g. bank), refer Applicant via Resident Type matrix

Note: Where the account statement(s) does not evidence the full funds to complete / own contribution, it is acceptable to proceed, where a satisfactory explanation is entered in application supporting notes, e.g. the applicant has paid a deposit on the property being purchased and where combined with funds evidenced via account statements, confirms funds to complete / own contribution.

2.6 Document translation

In the event foreign income and other supporting documents (e.g. account statements used to verify own contribution) are not in English or display a currency other than AUD, refer to Document Standards policy > When supporting documents are not in English or display a currency other than AUD.

The original documents, translated documents and Foreign currency translation checklist are to be retained in the loan file.

2.7 Applications with multiple applicants and varying visa types, citizenship or residency status

Where there are joint / multiple applicants, all applicants must be eligible as per policy requirements, regardless of their contribution to the loan, i.e. if the applicant type or visa held is not acceptable to the bank then the individual cannot to be a borrower, guarantor or owner of the security property. The following additional conditions apply:

The LVR may be restricted based on the visa type of the co-applicant.
Loan applications with multiple borrowers on the loan but only a single title holder are not permitted where one or more of the applicants is currently, or will continue to reside overseas post settlement. No financial benefit can be demonstrated for an applicant(s) that will continue to reside overseas post settlement, where they have no ownership in the security collateral.
Refer to Visa matrix and Applicant via Resident Type matrix for restrictions affecting each applicant type and to identify if mortgage insurance is available.

2.8 Approval from foreign investment review board (FIRB)

Holders of Australian temporary residency visas require approval from the Federal Government Treasury – Foreign Investment Review Board (FIRB). It is the responsibility of the purchaser to ensure approval is held.

Where the borrower is, or will be on the title, a copy of the FIRB approval must be held prior to issuing a formal approval. The loan application must be validated against the FIRB approval to ensure the application complies with the conditions under which the FIRB approval was issued.

FIRB exception: The only allowable exception to the FIRB requirement is where the applicant is purchasing or owns a property as Joint Tenants* (50/50), with an Australian or New Zealand citizen, or a Permanent Resident, who is their spouse.

* The exception does not apply where the property ownership is Tenants in Common (e.g. 80/20).

Where the applicant lives and works overseas and FIRB indicates approval is for their principal place of residence ^# , then the property:

Must be their principal place of residence while in Australia.
Cannot be used for investment (rental) or holiday purposes and rental income against this property is not acceptable.

Notes:

In some cases FIRB approval is granted to a specific development. The developer may receive a certificate identifying that further foreign investment approval is not required when sales are made to foreign persons.
A copy of the FIRB approval issued to the developer is to be retained on file. The offered security property (for purchase or refinance) should match the property identified in the FIRB approval.

2.9 Visa matrix and Applicant via Resident Type Matrix Overview

Applications may be accepted for consumer mortgage lending where the visa number is acceptable and any other conditions as detailed in the Acceptable Visa matrix and Applicant via Resident Type matrix are met.

The Acceptable Visa matrix details the:

Visa subclass number
Category of the visa type e.g. permanent or temporary
If the visa type is acceptable to Westpac Group
If the visa type is acceptable to the mortgage insurer
Acceptable employment status
Acceptable income type

The Applicant via resident type matrix details additional policy rules and conditions.
Also refer to Unacceptable Visas .

Notes:

Where an applicant holds a temporary or permanent visa that is:
- Not currently on the acceptable visa list, or the visa is no longer available, or you have been made aware of a new visa number (or subclass), then these can be referred to Credit for consideration and must be supported with detailed comments / notes and justification for acceptance.
- Listed on the Unacceptable visa list, then no lending is permitted either as a borrower or guarantor, no exceptions permitted even by Credit, refer Unacceptable Visas .
Migrant lending customers will only be acceptable if all conditions set out in the Acceptable Visa matrix and the Applicant via resident type matrix, and any additional policy requirements and visa conditions are met, e.g.:
- Business visa types should reflect income status and documentation from within Australia.
- Sponsored visa types should reflect income from that region, i.e. state or territory sponsored visa's should reflect income earned within Australia.
Applications that meet Migrant Lending policy requirements and require Mortgage Insurance, the Mortgage Insurer may consider any referral on a case-by-case basis with supporting commentary.

2.10 Visa Matrix

Additional information on Visa Numbers can be found at https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing

2.10.1 Acceptable Visas

Acceptable Visa Subclass Number	Perm / Temp	Acceptable to WBC Group	Acceptable to MI	Acceptable Employment	Acceptable Income
100	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
101	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
102	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
103	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
111 (refer note 10)	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
114	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
115	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
116	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
117	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
119	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
120	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
121	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
124	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
132	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
134	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
136	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
137	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
138	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
139	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
143	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
151	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
155	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
157	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
160	Temp	Yes	Yes	S/E	AUD
161	Temp	Yes	Yes	S/E	AUD
162 (refer note 6)	Temp	Yes	Yes	S/E	AUD
163	Temp	Yes	Yes	S/E	AUD
164	Temp	Yes	Yes	S/E	AUD
165 (refer note 5)	Temp	Yes	Yes	S/E	AUD
175	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
176	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
186	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
187	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
188 - Business Innovation	Temp	Yes	Yes	S/E	AUD
188 - Investor (refer note 7)	Temp	Yes	Yes	S/E	AUD
188 - Significant Investor (refer note 8)	Temp	Yes	Yes	S/E	AUD
188 - Business Innovation Extension	Temp	Yes	Yes	S/E	AUD
188 – Significant Investor Extension (refer note 8)	Temp	Yes	Yes	S/E	AUD
188 – Premium Investor (refer note 9)	Temp	Yes	Yes	S/E	AUD
188 – Entrepreneur	Temp	Yes	Yes	S/E	AUD
189	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
190	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
191	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
200	Perm	Yes	No	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
201	Perm	Yes	No	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
202	Perm	Yes	No	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
203	Perm	Yes	No	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
204	Perm	Yes	No	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
309	Temp	Yes	Yes	PAYG or S/E	AUD
405	Temp	Yes	Yes	PAYG or S/E	AUD
420	Temp	Yes	Yes	PAYG or S/E	AUD
444	Temp	Yes	Yes	PAYG or S/E	AUD
457	Temp	Yes	Yes	PAYG or S/E	AUD
461	Temp	Yes	No	PAYG or S/E	AUD
482 TSS Medium-Term (MLTSSL)	Temp	Yes	Yes	PAYG or S/E	AUD
482 TSS Labour Agreement Stream	Temp	Yes	Yes	PAYG or S/E	AUD
489 (superseded by 491)	Temp	Yes	Yes	PAYG or S/E	AUD
491	Temp	Yes	Yes	PAYG or S/E	AUD
494	Temp	Yes	Yes	PAYG or S/E	AUD
801	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
802	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
804	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
808	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
820	Temp	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
835	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
836	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
837	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
838	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
855	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
856	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
857	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
858	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
864	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
866	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
885	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
886	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
887	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
888	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
890	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
891	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
892	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
893	Perm	Yes	Yes	PAYG, S/E or Non-working¹	Foreign², AUD³ or nil income⁴
Legend item / notes:
Non-working = employment type includes home duties, retired, investor, unemployed, social security recipient or student Foreign = Applicant is living in a foreign country and the majority of income earned is foreign currency, for acceptable foreign income sources refer to Verifying Income policy > Foreign income and employment. AUD = Applicant living in Australia and the majority of income earned is in Australian dollars Nil Income = Applicant is living in either a foreign country or Australia and not earning income, e.g. home duties If applicants do not meet this criteria they may be a "Significant Investor". Proof of minimum AUD $750k Government bond investment is to be held and refer application to Credit for further consideration. If applicants do not meet this criteria they may be a "Significant Investor". Proof of minimum AUD $1.5m Government bond investment is to be held and refer application to Credit for further consideration. If applicants do not meet this criteria they may be a "Significant Investor". Proof of minimum AUD $2.5m Government bond investment is to be held and refer application to Credit for further consideration. Proof of minimum AUD $5.0m Government bond investment is to be held and refer application to Credit for further consideration. Proof of minimum AUD $15.0m Government bond investment is to be held and refer application to Credit for further consideration. Applicants using Visa 111 must be referred to Credit for acceptance. Authorities to Return (ATR) and Return Endorsements (RE) are old style return visas issued to permanent residents between 1 March 1976 and 31 December 1986. Evidence was issued in the form of a stamp or label in the holder’s passport and contain the words ‘Authority to Return’ or ‘Return Endorsement’. Authorities to Return and Return Endorsements can no longer be granted but may still be valid. The issue with the ATR/RE is they may only be evidenced in the passport and the Department of Home Affairs will not know from their own systems whether or not the visa was ever granted.

2.10.2 Unacceptable Visas

Unacceptable Visa Subclass Numbers and types
The visa types listed in this table are unacceptable to both Westpac Group and the Mortgage Insurers. Holders of the following unacceptable visas cannot be included either as a borrower, guarantor or title holder and their income cannot be used toward serviceability. Refer to Eligibility criteria and Applications with multiple applicants and varying visa types, citizenship or residency status.
110	159	173	302	303	310
400	401	403	407	408	411
415	416	417	422	423	428
445	456	462	475	482 TSS Short-Term (STSOL)	485
487	495	496	500	572	573
574	590	600	601	602	651
771	785	790	870	880	884
942	988

2.11 Applicant via Resident Type Matrix

Brokers and assessors must also refer to and follow any additional requirements as specified in the following policies:

Verifying Income
Loan to Value Ratio ( LVR )
Eligibility > Rules you must apply > Substantial benefit test

#	Applicant type	Ordinarily resident	Income	Visa subclass number acceptable as per Visa Matrix?	Employment & Income as per Visa matrix?	Policy rules
1	New Zealand citizen¹	In Australia	AUD	n/a	n/a	Mortgage Insurance available FIRB not required Proof of own contribution not required
2	New Zealand citizen¹	In Australia	NZD Foreign (PAYG only)	n/a	n/a	Mortgage Insurance is not available FIRB not required Owner builder is unavailable (all other products acceptable) Proof of own contribution not required
3	New Zealand citizen^1,6	In New Zealand / or other foreign country	AUD	n/a	n/a	Mortgage insurance is not available FIRB not required Product conditions apply⁴ Proof of own contribution required
4	New Zealand citizen^1,6	In New Zealand / or other foreign country	NZD / Foreign (PAYG only)	n/a	n/a	Mortgage insurance is not available FIRB not required Owner builder is unavailable (all other products acceptable). Product conditions apply⁴ Proof of own contribution required Where the passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country⁵
5	Permanent²	In Australia	AUD	Yes	n/a	Mortgage insurance available FIRB not required Proof of own contribution not required
6	Permanent²	In Australia	AUD	Yes	n/a	Mortgage insurance not available FIRB not required Proof of own contribution not required
7	Permanent²	In Australia	Foreign (PAYG only)	Yes	n/a	Mortgage insurance not available FIRB not required Owner builder is unavailable (all other products acceptable) Proof of own contribution not required
8	Permanent²	In Australia	Foreign (PAYG only)	Yes	n/a	Mortgage insurance not available FIRB not required Owner builder is unavailable (all other products acceptable) Proof of own contribution not required
9	Permanent^2,6	Out of Australia	AUD	Yes	n/a	Mortgage insurance not available FIRB not required Investment Products only (owner builder is unavailable). Applicants purchasing an Investment Property must have a minimum of 12 months remaining on their Australian Visa Proof of own contribution required Where the passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country⁵
10	Permanent^2,6	Out of Australia	AUD	Yes	n/a	Mortgage insurance not available FIRB not required Investment Products only (owner builder is unavailable) Applicants purchasing an Investment Property must have a minimum of 12 months remaining on their Australian Visa Proof of own contribution required Where the passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country⁵
11	Permanent^2,6	Out of Australia	Foreign (PAYG only)	Yes	n/a	Mortgage insurance not available FIRB not required Investment Products only (owner builder is unavailable) Applicants purchasing an Investment Property must have a minimum of 12 months remaining on their Australian Visa Proof of own contribution required Where the passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country⁵
12	Permanent^2,6	Out of Australia	Foreign (PAYG only)	Yes	n/a	Mortgage insurance not available FIRB not required Investment Products only (owner builder is unavailable) Applicants purchasing an Investment Property must have a minimum of 12 months remaining on their Australian Visa Proof of own contribution required Where the passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country⁵
13	Temporary^1,3,6	In Australia	AUD	Yes	Yes = Proceed as per Policy Rules column No and not reliant on this income = no lending is possible No and reliant on this income = no lending is possible	Applicant must have a minimum of 12 months remaining on their Australian Visa Mortgage insurance available. FIRB required Proof of own contribution not required All borrowers must have 30% ownership
14	Temporary^1,3,6	In Australia	AUD	Yes	Yes = Proceed as per Policy Rules column No and not reliant on this income = no lending is possible No and reliant on this income = no lending is possible	Applicant must have a minimum of 12 months remaining on their Australian Visa Mortgage insurance not available FIRB required Proof of own contribution not required All borrowers must have 30% ownership

Legend item#	Additional conditions
1	New Zealand and temporary visa residents Be aware that additional stamp duty may apply where NZ applicant does not hold a Special Category (Subclass 444) visa or temporary resident visa holder.
2	Evidence of Approved Permanent visa is to be held on file and verified by Mortgage Services. Acceptable document may be any one of: A copy of an Approved Permanent visa (refer Approved Migrant Visas: Migrant lending package) A copy of a current foreign passport with proof of permanent residence status A copy of a certificate of residence or the original Visa grant approval letter issued by the Department of Home Affairs A printout of the Visa Details Check from the Visa Entitlement Verification Online (VEVO) website https://online .immi.gov.au/evo/firstParty?actionType=query%20
3	Evidence of an Approved Temporary visa is to be held on file and verified by Mortgage Services. Acceptable document may be any one of: A copy of a current foreign passport with proof of acceptable temporary visa A copy of the original Visa grant approval letter issue by the Department of Home Affairs A printout of the Visa Details Check from the Visa Entitlement Verification Online (VEVO) website https://online .immi.gov.au/evo/firstParty?actionType=query%20
4	All products available If the security is for owner occupation by spouse or family member but this applicant lives out of Australia, then include detail of the following in the loan application: Overseas rental outgo Property asset relating to overseas residence (if owned / purchasing) Any associated overseas mortgage repayments and liabilities.
5	Earning income in China Where applicants are earning income in China the following additional documents are required: a) Z Visa. The Z Visa is only a vehicle to enter China for a limited period of time. Upon arrival, the Z visa holder must then obtain work and residence permits which will allow them to legally work in the country. b) Work Permit (Alien Employment License) c) Resident Permit
6	For all applicant types, substantial benefits test requirements must be met, refer Eligibility > Rules you must apply > Substantial benefit test The following borrowers must have a minimum 30% ownership: New Zealand citizens and Permanent Visa holders who ordinarily reside out of Australia, and All temporary Visa holders who are ordinarily a resident in or out of Australia

2.12 Non-Resident Lending

A non-resident is defined as an individual who:

Does not hold Australian Citizenship or an approved Australian Permanent residency visa, or
Holds an approved Australian Temporary residency visa, however, does not ordinarily reside in Australia

Note: New Zealand citizens living in Australia are not considered non-residents for the purpose of this policy.
Lending to a non-resident applicant(s) is not permitted either as a borrower or guarantor, even where the non-resident income is not relied on to meet serviceability, for:

A new consumer mortgage, or
An increase to an existing consumer mortgage, or
A variation activity which requires a serviceability assessment

No exceptions to the above are permitted (including Credit).

3. Process to follow

3.1 Migrant lending package application process

Process application as per normal and upload a copy of customer's visa type within ApplyOnline in accordance with section 3.2 below. In loan application notes, add any supporting information (excluding applicant’s Australian visa number).

Note:
All other lending criteria and process remain unchanged, such as the customer must hold a valid IDV and income documents.
All migrant temporary visa borrowers must provide a copy of their Foreign Investment Review Board (FIRB) approval (where applicable), refer Approval from FIRB, which must be complied with and uploaded into ApplyOnline.

3.2 Evidencing migrant visa

Migrant status must be evidenced via provision of a:
- copy of a work visa approval issued by Department of Home Affairs – Immigration and citizenship; or
- printout supplied by the customer from the VEVO website https://online.immi.gov.au/evo/firstParty?actionType=query
Where an applicant’s migrant category is Investor Visa type, evidence is to be provided of approved deposit funds held with State Treasury

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	9 November 2021	Links updated
3	10 November 2021	Translation Checklist attached
4	3 April 2022	Updated section ‘Applicant via Resident Type Matrix’: Deleted ‘where LVR >90% DUA2 approval required’ from scenario 9 ‘Applicant type’: Permanent> ” ’ Ordinarily resident ~~’ :~~ ’: Australia>’Income’: AUD>’Visa subclass number’: acceptable as per VISA Matrix (for MI and non-MI). DUA2 approval is no longer required for this scenario Deleted ‘ ( ‘(Max LVR 90% inclusive of capped premium – subject to ALMI approval (DUA4)).’ from scenario 17 ‘Applicant type’: Temporary> ” ’Ordinarily resident’ : Australia>’Income’: AUD>’Visa subclass number’: acceptable as per VISA Matrix (for MI and non-MI). DUA4 approval is no longer required for this scenario
5	17 July 2022	Changes: Sections re-numbered Section 2.1.5 Substantial Benefit Test section deleted as this is duplicated content to that located in Eligibility > Rules you must apply > Substantial benefit test Minor wording update 2.6 Applications with multiple applicants and varying visa types, citizenship or residency status FIRB content from Applicant via resident matrix moved to 2.7 Approval from foreign investment review board (FIRB) and re-worded. 2.8 > Visa matrix and Applicant via Resident Type Matrix section re-named 2.8 > Visa matrix and Applicant via Resident Type Matrix section Overview with some content split into new section 2.9 > Visa matrix Visa Matrix updated as follows: Split into Acceptable and Unacceptable Visas tables, New Visas added and cancelled / repealed visa removed as per Home Affairs list of current visas Visas 173 & 884 previously acceptable to WBC Group moved to the unacceptable visa list to align with LMI appetite Visas 200 to 204 inclusive are now acceptable to LMI All permanent visas have been aligned to allow PAYG, SE or nil employment (e.g. home duties) and foreign (PAYG), AUD or nil income Visa 188 split into 7 sub categories with notes updated to reflect the investment required to be evidenced, where applicable Applicant via resident matrix updated as follows: Removed duplicated references to other policy sections throughout the table and instead added these references to start of table Removed the following content for all permanent visa holders as no longer applies: Yes = Proceed as per Policy Rules column No and not reliant on this income = no lending is possible No and reliant on this income = no lending is possible Duplicated content removed from additional conditions section of matrix as follows: FIRB moved to section 2.7 Approval from foreign investment review board (FIRB) Cross collateralised foreign income loans as covered in Loan to Value Ratio (LVR) > LVR by borrower type and income source
6	21 August 2022	Change 1 Updated section>Applicant via Resident Type Matrix> to include additional document types that can be used to evidence permanent residency: A copy of the original Visa approval letter issued by the Department of Home Affairs A printout of the Visa Details Check from the Visa Entitlement Verification Online (VEVO) website https://online .immi.gov.au/evo/firstParty?actionType=query%20Added supporting document evidence for temporary vias holders: Change 2 Updated section>Applicant via Resident Type Matrix> To include supporting document requirements for Temporary visa: Evidence of an Approved Temporary visa is to be held on file and verified by Mortgage Services. Acceptable document may be any one of: A copy of a current foreign passport with proof of acceptable temporary visa A copy of the original Visa grant approval issued by the Department of Home Affairs A printout of the Visa Details Check from the Visa Entitlement Verification Online (VEVO) website https://online.immi.gov.au/evo/firstParty?actionType=query%20 Change 3 Minor wording change to section>Evidencing migrant visa: Changed VEVO web page to VEVO website
7	2 October 2022	Change 1 Chapter name c hanged from Migrant Lending T o Lending to Non-Australian citizens Change 2 Updated section ‘Applicant via resident type matrix’: For scenario ‘Applicant type=Temporary Resident/Ordinarily Resident = in Australia / Income = AUD/ Visa subclass number acceptable as per visa matrix = Yes: Deleted footnote ‘Note: Genworth MI cover is not available’ and associated legend item ‘Genworth Mortgage Insurance cover is not available on any loans to Temporary residents. I.e. Top Up of Genworth MI premium in this scenario is not permitted.’ Deleted ‘Note: Income other than foreign salary / wage income is to be verified under the applicable section of the Verifying Income policy’ – housekeeping/simplification change only, as this section already specifies ‘Lenders and assessors must also refer to and follow any additional requirements as specified in the ‘verifying income’ policy’ Change 3 General rewrite to remove procedures from policy and improve policy clarity, which includes: Added new subheading and content > 2.1 Establishing citizenship and residency Added new subheading 2.12 Non-Resident Lending with content moved from chapter 2.14 Non-Resident Lending Deleted content relating to Australian citizens (including acceptable documents for evidencing Australian citizenship) from Applicant via Resident Type Matrix, this content moved to Eligibility chapter Change 4 Added legend item to Applicant via Resident Type Matrix to reflect applicant types that require a minimum 30% ownership Change 5 Added policy rule for temporary visa holders residing in or out of Australia to have 30% ownership as follows: All borrowers must have 30% ownership, refer Eligibility > Rules you must apply > Substantial benefit test
8	20 November 2022	Change 1 Updated table in section ‘Applicant via Resident type matrix’ for Temporary visa holders as follows: Old wording All borrowers must have 30% ownership, refer Eligibility > Rules you must apply > Substantial benefit test New wording All borrowers must have 30% ownership
9	20 November 2022	Change 2 Update to content in section 2.6 Document translation Old wording In the event foreign income and other supporting documents (e.g. account statements) used to verify own contribution are not in English or are in a foreign currency, the applicant is to provide an English translation prepared by an accredited translator at their own cost. Translation of documents by either a Westpac Group staff member or a Westpac Group Finance Broker is not permitted. The original documents, translated documents and Translation Checklist are to be retained in the loan file, refer Verifying Income > Foreign income and employment. New wording 2.6 Document translation In the event foreign income and other supporting documents (e.g. account statements) used to verify own contribution are not in English or display a currency other than AUD, refer to Document Standards policy > When supporting documents are not in English or display a currency other than AUD. The original documents, translated documents and Foreign currency translation checklist are to be retained in the loan file.
10	19 February 2023	Change 1 Updated section ‘2.10.1 Acceptable Visas’ to include new permanent Visa 191 Change 2 Updated section ‘2.5 Own Contribution Validation’ to include the following: New wording: Note: Where the account statement(s) does not evidence the full funds to complete / own contribution, it is acceptable to proceed, where a satisfactory explanation is entered in application supporting notes, e.g. the applicant has paid a deposit on the property being purchased and where combined with funds evidenced via account statements, confirms funds to complete / own contribution.
11	26 March 2023	Change 1 Updated section 2.4 Income and employment verification to remove content that is duplicated in other policy sections. Old wording If income earned is in AUD : verify the AUD income as per Verifying Income , policy. If any foreign income is declared and required for servicing: Confirm the applicant's income and employment is compliant with requirements in the Acceptable Visa matrix and Applicant via Resident Type matrix Verify foreign income as per Verifying Income policy > Foreign income and employment Be aware that the foreign income can impact: the maximum LVR availability of mortgage insurance loan purpose (e.g. refinance / cash out exclusions) product availability Note: Temporary residency visa holders earning foreign income are not eligible for lending as either a borrower or guarantor and the application is unable to proceed Refer to Loan to Value Ratio (LVR) policy > LVR by borrower type and income source and Applicant via Resident Type matrix New wording Where the application includes foreign income, or Australian Dollar (AUD) income from foreign PAYG employment, refer to and follow the requirements in: Verifying Income > Foreign income and / or employment Loan to Value Ratio (LVR) policy > LVR by borrower type and income source and Applicant via Resident Type matrix

Attachments

Attachment

03.13 Translation Checklist CSH.xlsm

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03.14 Non-Resident Lending

Policy ID

03.14

Policy Name

Non-Resident Lending

Policy Content

This policy contains commercially sensitive and confidential information. No part should be made available in any form whether printed, electronic or otherwise, outside the Westpac Group without approval from Westpac Legal or Regulatory affairs.*** This document is an UNCONTROLLED copy and is subject to change without prior notification. It is only valid at the date of extract. ***

Table of Contents

1. About this policy
1.1 Why this policy
2. Rules you must apply
2.1 Definitions of non-residents lending
2.2 Establishing citizenship / residency status

1. About this policy

1.1 Why this policy

This policy outlines the parameters for assessing loan applications that involves non-resident borrower(s) in a consumer mortgage application.

2. Rules you must apply

2.1 Definitions of non-residents lending

For residential lending purposes a non-resident individual is defined as:

A person who does not hold Australian Citizenship or approved Australian Permanent residency visa, or
A person who does hold an approved Australian Temporary residency visa however does not ordinarily reside in Australia

Note:

New Zealand citizens living in Australia are not considered non-residents for the purposes of this policy
This policy does not apply to migrant applicants. Refer to Migrant Lending policy for further information

Where any one or more borrower or guarantor meets the definition of ‘non-resident’, none of the below lending activities are permitted, even if the ’non-resident’s’ income is not relied on to meet serviceability:

New loan
For existing loans involving a non-resident borrower or guarantor:
- Loan Increase/Top Up
- Refinance
- Cash out
- Servicing (Variation) activity that requires a loan origination (as refinance is not permitted)

No exceptions to the above are permitted by any credit risk authority holder (including Credit).

2.2 Establishing citizenship / residency status

Non-resident status may be identified where a foreign passport is presented for identification purposes or the applicant(s) is identified as residing overseas.
A customer’s citizenship, visa type or non-residency status must be established at initial application stage.

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	2 October 2022	Removal of 03.14 Acceptable country & currency list.pdf - will now be attached in 03.27 Verifying Income

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03.15 Property Insurance

Policy ID

03.15

Policy Name

Property Insurance

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Responsibilities
2.2 When and what cover is required?
2.3 Insurance policy details (Certificate of Currency)

1. About this policy

1.1 Why this policy?

The Bank requires acceptable building insurance cover on a replacement and reinstatement basis over the real estate property used as security collateral for the loan.
Insurance cover will protect the value of the secured asset in the event the owner and Bank is required to rely upon it.
Adequate insurance cover is to be maintained for the duration of the loan.

2. Rules you must apply

2.1 Responsibilities

It is the responsibility of the borrower to:

Take up the building insurance cover prior to loan settlement with an Australian insurer
Take out any other insurances required by policy, such as builder’s risk insurance
Negotiate with the insurer on the minimum cover amount with a recommendation of full replacement cost
Have a current or renew building insurance policy during the loan contract term. Failure to do so is a breach under the terms of the contract and mortgage by borrower/ mortgagor.

The Bank cannot suggest a minimum amount the property must be insured for.

2.2 When and what cover is required?

Security Property Collateral Type	When is the cover required	What cover is required
Strata Title	This property insurance policy does not apply. If security collateral is of a different type, comply with the below policy
Vacant land security collateral where the Bank is relying solely on the (vacant) land value
Completed (not under construction) property	Prior to settlement	Building insurance policy or certificate of currency^1,2
Property under construction- Licensed Builder	Prior to final progress payment being released	Building insurance policy or certificate of currency^1,2
Property under construction- Owner Builder	During construction	Builder’s risk insurance² which must: be taken out by the owner builder cover the building work
Property under construction- Owner Builder	Prior to final progress payment being released	Building insurance policy or certificate of currency^1,2
Property under construction- Kit Homes/Transportable Homes	During periods of manufacture (Kit), transport/delivery (Kit and Transportable), and construction	Builder’s risk insurance² which must: be taken out by the borrower cover the building work cover the whole period until practical completion (lock up)
Property under construction- Kit Homes/Transportable Homes	Prior to settlement (first advance)	Building insurance policy or certificate of currency^1,2
¹ Must: be on a replacement and reinstatement basis for an amount at least equal the full replacement cost, and cover against fire, storm, flood cover in flood prone areas and other risks as might be specified ²The Progressive Draw / document preparation / settlements team must ensure that evidence of the required insurance(s) is held.

2.3. Insurance policy details (Certificate of Currency)

The copy of the Insurance Policy or Certificate of Currency must include the following:

The owner of the security collateral (upon settlement / drawdown)
Policy number
Insurance company
Expiry date of the policy
Adequate description of the location of the security collateral, e.g. address, title details
Amount of cover on a replacement and reinstatement basis for an amount at least equal to the full replacement cost

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	20 November 2022	Policy Standards and Procedure rewrite
4	19 February 2023	Change 1 Remove Document requirement for Banks Interest as Mortgagee to be noted on Insurance policy

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03.16 Self-Employed Applicants

Policy ID

03.16

Policy Name

Self-Employed Applicants

Policy Content

1. About this policy.

1.1 Why this policy.

This section outlines the policies for assessing self-employed applicants within a consumer mortgage application.

Throughout this policy when the term 'business' is used it may include income generated by a sole trader, personal services, partnership, company, or trust.

You may also need to refer to other lending policy rules, including but not limited to:

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance where required.

2. Rules you must apply

2.1 Identifying and Assessing self-employed applications

Where the applicant earns PAYG income (or other supplementary income) but also has a directorship ¹ or ABN for a business, and the applicant is not being assessed under Fast Track, Lenders / Assessors are required to identify how the applicant is related to the business and if the applicant is a director and / or shareholder. Where the applicant is a director and / or shareholder, further investigation of the business is to be completed (even where income from the business is not being used for serviceability assessment) to establish the below:

When the applicant became a director;
The percentage of shareholding;
If the business is trading / non-trading; and
If the business is profitable or able to able to service it's own commitments

¹ Where the applicant is either an Independent director or an Executive director they are not considered to be the business owner and do not need to be assessed as a self-employed applicant.

Independent director: A director that does not have a vested interest i.e. they are not a shareholder and the directorship is not held in a business that is owned (shareholding > 0%) or controlled (directorship) by a spouse or family member (e.g. child or parent) or a subsidiary entity of the director or director's spouse / family member.
Executive director: A director that does have a vested interest (a minor % shareholding of <=5%) however limited to also being an independent PAYG employee. E.g. the CEO of Westpac is a director but also an independent PAYG employee (PAYG employee of a business that is not their own business).

For further information about how to investigate directorships refer to Completing ABN, business name or company searches.

Assessing self-employed applicants is different from assessing PAYG applicants for a number of key reasons as follows:

Salary or drawings taken from a business by a self-employed applicant may not reflect the underlying sustainable earnings capability of the business. The owner may be draining the business of its reserves by paying him/herself an inflated salary, over and above what the business can afford.
The earnings of a self-employed applicant may vary significantly from year to year depending on business cycles and how well the business is performing. Significant variations may affect the applicant's ability to repay the loan and therefore the variability of income is to be included as part of the assessment process.
Private and business expenses can become intermingled.
Self-employed people have a greater opportunity to adjust their income to indicate servicing capacity that may not exist.
Self-employed people may have a number of sources of income that have to be taken into account when assessing their capacity to service.

A separate process is necessary for self-employed applications to:

Determine real income available for loan servicing.
Ensure an appropriate legal structure for the loan.
Ensure appropriate security arrangements for the loan.

Any non self-employed income is to be verified as per policy contained in Verifying Income.

Supporting Documents
All supporting documents are to be uploaded to ApplyOnline and Tax file numbers must be redacted from any document provided to the bank.

Age of documents

Refer to:

Document Standards for maximum age of document requirements and minimum document standards
Loan Application and Approval > Responsible Lending Start Date

2.1.1 Applications by income source

Income Scenario	Additional requirements
Sole trader Note: includes independent contractors, receiver of personal services income (income type PSI in Australian tax returns)	The self-employed entity is to have been established and trading for a minimum of two full financial years¹. ABN registration² must be confirmed by the Broker / Assessor via an ABN search and the search retained in the loan file. Refer to completing ABN, business name or company searches May be eligible for assessment using Fast track self-employed assessment, see section 2.4 for full details of eligibility criteria Where not eligible for fast-track assessment, refer to Fully verified self-employed assessment. Also see: Allowable addbacks Verifying Income Document Standards Accountants letter Loan Application and Approval Details of Business Commitments, Living expenses must be included for serviceability assessment and verified where required under policy Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing a sole trader tax return, start with the business and professional items section and use the “NET income or loss from business” figure (typically item P8 in the personal tax return). This figure is prior to any addbacks, subtractions, or adjustments as required in terms of Self-employed policy. Note: if the individual received Personal Services Income (PSI) it will be reflected in the Business and professional items section at P1. The “Net PSI” income figure can be added to the “Net income or loss from business” figure
Partnership	The self-employed entity is to have been established and trading for a minimum of two full financial years¹. ABN registration² must be confirmed by the Broker via an ABN search and the search retained in the loan file. Refer to completing ABN, business name or company searches. May be eligible for assessment using Fast track self-employed assessment, see section 2.4 for full details of eligibility criteria. Where not eligible for fast-track assessment, refer to Fully verified self-employed assessment. Also see Allowable addbacks Verifying Income Document Standards Accountants letter Loan Application and Approval Partnership net profit distributions used in the serviceability assessment must not exceed the historical distribution percentage. Details of Partnership Commitments must be included for serviceability assessment and verified where required under policy. Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing a partnership tax return, start with the “Net Australian income – other than capital gains” figure (this would typically be item 20 in the tax return). This figure is prior to addbacks, subtractions, or adjustments as required in terms of self-employed policy. Note: if the partnership includes foreign income and an exception has been requested to consider this income, then use the “Total of items 20 - 23” figure (typically item 24 in the tax return). This figure is the total income figure after the “Net Australian income - other than capital gains” figure. Financials (profit loss and balance sheets), when required to be provided, are to be used as supporting information to help understand the business, including the income type, addbacks, subtractions, liabilities, profitability, and the flow of income between the business, individuals, and other entities.
Use of undistributed company profits towards individual serviceability calculations	Where the borrower(s) is both a current company director and a shareholder, and owns a controlling interest in a company* (i.e. ≥ 50% shareholding) currently and for the two financial years being assessed (or one year where acceptable to use one year’s financials, e.g. Medico) and there is a shortfall in serviceability from the borrowers individual incomes, undistributed company earnings may be added to the borrowers' incomes, only proportionate to the level of ownership / shareholding held. To establish that the borrower(s) has met the eligibility criteria for use of undistributed company profits, the Broker / Assessor must complete a company search and review the search to confirm the borrower(s): Is a current director and Currently holds >=50% shareholding in the company and Was a director and >=50% shareholder in the company for the two financial years being assessed (including where backdated), or one year where acceptable to use one year’s financials (e.g. Medico) Refer to completing ABN, business name or company searches. The Broker is required to record comments in the assessment system confirming the above and upload to ApplyOnline the company search and any relevant document search relating to a change(s) to directorship and / or shareholding. The borrower(s) will be ineligible to use undistributed company profit where they are not currently a director and >=50% shareholder, have been added as a director and /or shareholder^# or their shareholding has increased to ≥50% (including where backdated), during the two financial years used in the serviceability assessment (or one year where acceptable to use one year’s financials, e.g. Medico). Where it is evident over the two financial years (or one year where acceptable to use one year’s financials, e.g. Medico) used in the serviceability assessment or in the period preceding the loan application submission, that a borrower’s shareholding in a company: Meets the minimum 50% ownership requirement, but has increased (e.g. FY19 50% shareholding and FY20 70% shareholding), then the lower historical shareholding ownership percentage (e.g. 50%) of the banks calculated adjusted net profit after tax and repayments may be used in serviceability assessment Has decreased from ≥ 50% to < 50%, then unable to use company profit in the serviceability assessment. Where the company is making a loss, the loss however must still be included in the serviceability assessment, refer to Self-employed activity has made a loss or if it has been identified it cannot service its commitments on its own. ^#Where there is more than one borrower and the borrowers combined have >= 50% shareholding, they are eligible to use undistributed company profit to their combined ownership % amount. This is not a policy exception. Note: For all loan applications using undistributed company profits in serviceability, the impacts to the company must be discussed with the borrower(s) and documented in the loan assessment notes. The customer needs to confirm that the company has not used the profits for any other purpose and the funds are available to assist with the borrower’s personal commitments. The self-employed entity is to have been established and trading for a minimum of two full financial years¹. ABN registration² must be confirmed by the Broker / Assessor via an ABN search and the search retained in the loan file. Refer to completing ABN, business name or company searches Not eligible for Fast track assessment, refer to Fully verified self-employed assessment. Also see: Allowable addbacks Verifying Income Document Standards Accountants letter Loan Application and Approval Directors and Shareholders (Ownership) must be confirmed by the Broker / Assessor and evidence retained in the loan file. Refer to completing ABN, business name or company searches Percentage of ownership / shareholding of the Company must be loaded in the Serviceability Calculator Where undistributed company profits are used towards an individual's serviceability calculation, the additional income will be used to determine the individual's HEM band. The assessment system will automatically determine the applicable HEM band based on the income loaded. Details of company loans and other company Commitments must be loaded in the Serviceability Calculator, included with the serviceability assessment, and verified. Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing a company tax return, start with the “Taxable / net income or loss” figure, after any reconciliations (this would typically be item at 7 in the tax return). This figure is prior to addbacks, subtractions, or adjustments and after any reconciliations as required in terms of Self-employed policy. Note: Financials (profit loss and balance sheets) when required to be provided, are to be used as supporting information to help understand the business, including the income type, addbacks, subtractions, liabilities, profitability, and the flow of income between the business, individuals, and other entities.
Dividend received from own company and used for serviceability calculations (not using any undistributed company profit) Note: when using the actual dividend received only, the company must be trading at a profit. The shareholder percentage may be <50%.	Care must be exercised when considering dividend payments. Confirm the dividend payment has been paid regularly each year. Review past two years tax returns for the individual to confirm receipt. Confirm the dividend has been paid out of current year company profits in each financial year used in the serviceability assessment and not out of retained profits carried forward from previous years. Confirm the dividend is not related to a 'once' off event for example, capital gain via sale of an asset. Dividends paid must be traced back to the original earning entity with the Serviceability Calculator fully completed to confirm, the historic dividend received does not exceed the banks calculated “Director’s Income for Serviceability”. Note: The actual dividend received for both financial years must be added together and divided by two, this average figure must then be compared to the “Director’s Income for Serviceability” figure from the Serviceability Calculator with the lower of the two figures used in serviceability. If the company is trading at a loss, the dividends cannot be used and the company must be fully assessed and included in the serviceability assessment refer to Self-employed activity has made a loss of if it has been identified it cannot service its commitments on its own. The self-employed entity is to have been established and trading for a minimum of two full financial years¹. ABN registration² must be confirmed by the Broker / Assessor via an ABN search and the search retained in the loan file. Refer to completing ABN, business name or company searches Not eligible for Fast track assessment, obtain the following income verification documents: Last 2 years Company tax returns and financial statements (profit loss and balance sheets must be reviewed to identify if Company is trading profitably or at a loss) and Last 2 years Personal tax returns are required, supported by: For non-mortgage insured: latest single year ATO notice of assessment; or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal For mortgage insured: each years ATO Notice of assessment; or If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal Note: Where an ATO NOA is used, whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant. Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing a company tax return, start with the “Taxable / net income or loss” figure, after any reconciliations (this would typically be item at 7 in the tax return). This figure is prior to addbacks, subtractions, or adjustments and after any reconciliations as required in terms of Self-employed policy. Note: Financials (profit loss and balance sheets), when required to be provided, are to be used as supporting information to help understand the business, including the income type, addbacks, subtractions, liabilities, profitability, and the flow of income between the business, individuals, and other entities
PAYG income from own company and / or Directors fees from own company only and no other form of company income is being used for loan serviceability	May be eligible for assessment using Fast track self-employed assessment, see section 2.4 for full details of eligibility criteria The self-employed entity is to have been established and trading for a minimum of two full financial years¹. ABN registration² must be confirmed by the Broker / Assessor via an ABN search and the search retained in the loan file. Refer to completing ABN, business name or company searches. Where not eligible for fast-track assessment, obtain the following income verification documents: Last 2 years Trust and / or Company tax returns (to identify if Company is trading profitably or at a loss) and financial statements (including profit and loss accounts and balance sheets) showing two years of financial data corresponding to the tax returns provided and Last 2 years Personal tax returns supported by: For non-mortgage insured: latest single year ATO notice of assessment; or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal For mortgage insured: each years ATO Notice of assessment; or If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal Note: Where an ATO NOA is used, whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant). Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing PAYG (salary or wages) and/or director fees from own company, use the historic PAYG and/or director fee income received from own company (in each separate financial year the income was received). This will typically be located at item 1 the individual personal tax return. When assessing a company tax return to confirm profitability, start with the “Taxable / net income or loss” figure, after any reconciliations (this would typically be item at 7 in the tax return). This figure is prior to addbacks, subtractions, or adjustments and after any reconciliations as required in terms of Self-employed policy. Note: Financials (profit loss and balance sheets), when required to be provided, are to be used as supporting information to help understand the business, including the income type, addbacks, subtractions, liabilities, profitability, and the flow of income between the business, individuals, and other entities For verification and calculation requirements refer to: Fully verified self-employed assessment Allowable addbacks Verifying Income Document Standards Accountants letter Loan Application and Approval
	If the company is trading profitably and meeting all commitments: Include commentary about the company’s profitability in ApplyOnline assessment notes Upload the financials with the other income assessment documents Brokers / Assessors will not be required to obtain details of company loans and other company commitments, unless it is specifically requested by Credit for loans referred to those areas.
	If the company is trading at a loss: When the company is trading at a loss details of Commitments, Living expenses must be included for serviceability assessment. Refer to Self-employed activity has made a loss or if it has been identified it cannot service its commitments on its own
Distribution of income from a trust to an individual	Distributions may be considered when they are evidenced as regular and on-going and where the individual receiving the distribution from the trust, is contributing to the serviceability assessment, i.e. are joint applicants or assessed under Apportioned shared commitments. Refer to Serviceability > Apportioned shared commitments. Where the recipient of the distribution is not the trustee of the trust: Refer to Unacceptable self-employed income. Where the borrower or borrower's entity, have not previously received a distribution from the trust in prior years, only Credit may consider the use of this income towards serviceability calculations. Redirection of trust distributions from other beneficiaries may have adverse financial impacts. Trust distributions must be traced back to the original earning entity to ensure the distribution does not exceed the adjusted net profit after tax and repayments and beneficiary’s income for Serviceability. The adjusted net profit and or beneficiary’s income for Serviceability value’s may be less than the actual distribution reflected in the personal return because the trust expenses may only include items that are claimable for taxation purpose. Expenses such as principal loan repayment obligations may not be included with the expenses. As a result, the actual trust disbursement received by an individual may be inflated. Trust distributions used in the serviceability assessment must also not exceed the beneficiary’s historical distribution percentage. Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing a trust tax return, start with the “Total net income or loss” figure (this would typically be item 26 in the tax return). This figure is prior to any addbacks, subtractions, or adjustments as required in terms of Self-employed policy. Note: Financials (profit loss and balance sheets), when required to be provided, are to be used as supporting information to help understand the business, including the income type, addbacks, subtractions, liabilities, profitability, and the flow of income between the business, individuals, and other entities Where not eligible for Fast track assessment refer to Fully verified self-employed assessment. Also see: Allowable addbacks Verifying Income Document Standards Accountants letter Loan Application and Approval
Distribution of income from a trust to a company	Distributions may be considered when evidenced as regular and on-going and where the company receiving the distribution from the trust is contributing to the serviceability assessment. Where the borrower or borrower's entity, have not previously received a distribution from the trust in prior years, only Credit may consider the use of the income towards serviceability calculations. Redirection of trust distributions from other beneficiaries may have adverse financial impacts. Trust distributions must be traced back to the original earning entity to ensure the distribution does not exceed the adjusted net profit after tax and repayments and beneficiary’s income for Serviceability. This adjusted net profit and or beneficiary’s income for Serviceability value’s may be less than the actual distribution reflected in the company return because the trust expenses may only include items that are claimable for taxation purpose. Expenses such as principal loan repayment obligations may not be included with the expenses. As a result, the actual trust disbursement received may be inflated. Trust distributions used in the serviceability assessment must also not exceed the beneficiary’s historical distribution percentage. Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment. When assessing a trust tax return, start with the “Total net income or loss” figure (this would typically be item 26 in the tax return). This figure is prior to any addbacks, subtractions, or adjustments as required in terms of Self-employed policy. Note: Financials (profit loss and balance sheets), when required to be provided, are to be used as supporting information to help understand the business, including the income type, addbacks, subtractions, liabilities, profitability, and the flow of income between the business, individuals, and other entities For verification and calculation requirements refer to Fully verified self-employed assessment. Also see: Allowable addbacks Verifying Income Document Standards Accountants letter Loan Application and Approval
Applicant has PAYG income from a Business wholly or partially owned by their spouse, and The applicant’s spouse is a co-borrower / income guarantor or assessed under Apportioned Household Expenses and Commitments, on the new loan	The applicant may be assessed as: PAYG applicant as per Verifying income > Rules > Family employee, or The same as a self-employed applicant, where assessed using the same self-employed income assessment method used to verify the applicant’s spouses' income, e.g. fully verified, Fast Track
Applicant has PAYG income from a Business wholly or partially owned by their spouse, and The applicant’s spouse is not a co-borrower / income guarantor or assessed under Apportioned Household Expenses and Commitments, on the new loan	The applicant may be assessed as: PAYG applicant as per Verifying income > Rules > Family employee

¹ Applicants that have been self-employed for more than 12 months but less than two full financial years are considered an exception to policy and will require referral to Credit for consideration.
These applicants must be able to demonstrate a solid history of experience and expertise in the same industry of the self-employment prior to the commencement of the self-employment.
² An ABN is compulsory under the Act in order for the business to register for compulsory GST where a 'for profit' enterprise has a GST turnover (i.e. business turnover) of ≥ $75,000.

2.1.2 Self-employed activity has made a loss or if it has been identified it cannot service its commitments on its own

The loss must be reflected in the serviceability assessment. Applicants will need to explain how any ongoing business commitments will be met. It is vital to understand if the individuals are going to be negatively impacted by the business's financial position. Loan application notes must capture outcomes of the Broker’s discussion with the applicant.
If the business is trading at a loss or if it has been identified it cannot service its commitments on its own, you are unable to rely on ‘latest year’ financial information or 'Accountants letter/email advice’.
Where a borrower’s shareholding in a company has reduced (e.g. 80% to 20%) across the two financial years used in the serviceability assessment or in the period preceding loan application submission and the company is trading at a loss, then the loss must be apportioned to the borrower based on the borrower’s highest percentage ownership (e.g. 80%), over the period being assessed.

Refer to completing ABN, business name or company searches.

Complete requirements as per:

Applications by income source

2.1.3 Exceptions to providing 2 years tax returns / financials

ABN search may be completed via ABN look-up, IQ Connect search or Dye & Durham
Company search may be completed via IQ Connect or Dye & Durham

Business does not trade and has no current or deferred commitments identified. Includes where: Business is newly established. Business has ceased trading.	Complete an ABN search to validate if the ABN is or is not active
	If the entity has no active ABN	If the entity has an 'active' ABN for a business which does not trade
	Includes where the entity has never registered for an ABN or the ABN has been cancelled or deactivated. This scenario may be accepted where the below activities are completed: Verification that the ABN is not ‘active’ has been completed and must be uploaded to ApplyOnline. ApplyOnline assessment notes include commentary of the verification outcome. Refer to Process > Completing ABN business name or company searches for further information and examples.	This scenario may be accepted by the Broker / Assessor without referral to Credit where the below activities are completed: Obtain an Accountants letter, or Accountants email advice. Specific information must be included on the supporting document, you must refer to Accountants letter section for more information. ApplyOnline assessment notes must include commentary of the verification outcome. Note: This option can-not be used where: Financials were provided by the applicant to the Bank; or The entity has current or deferred commitments, as we will need to understand how those commitments will be repaid if the entity is no longer trading
Directorship and shareholding relates to Company Title security For definition of a Company title, refer to Glossary	This scenario may be accepted by the Broker / Assessor without referral to Credit where the below has been confirmed: Complete a company search: Where the search result confirms sub-class 'Home unit proprietary company': Include commentary in ApplyOnline assessment notes; and Upload the Company search to ApplyOnline. Note: Company search may be completed via IQ Connect or SAI global See example of company title search
Applicant is self-employed and no income from the related business / self-employed entity is used towards serviceability and Business / self-employed entity is trading Business income includes the below types, where the business may be wholly or partially owned by the applicant: Directors fees Dividends PAYG (from the business) Undistributed company profit Trust distributions Partnership distributions Sole trader net profit Personal services income	This policy applies where: The applicant is a director / shareholder of a company and is also a PAYG employee of an unrelated business. The loan services on the applicants unrelated PAYG income solely. E.g. the borrower is PAYG employed by Westpac and they also have business income. Applicant '1' is self-employed (may be a director / shareholder of a company / sole trader / partnership), applicant '2' is a PAYG employee in a business completely unrelated to applicant '1'. The loan services on applicant 2's income solely. Obtain the following income verification documents: Latest single year personal tax returns supported by: ATO Notice of Assessment (if self-employed as a sole trader or personal services income only); or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal (if self-employed as a sole trader or personal services income only) Note: Where an ATO NOA is used, whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); and Latest Partnership tax returns (if a partnership); or Latest single year of Trust and / or Company financial statements (including profit and loss accounts and balance sheets) (if a company / trust) showing last 2 years of financial performance OR where tax returns / financials are not held, the applicant may provide: Accountants letter; or Accountants email advice Specific information must be included on the Accountants letter / Accountants email advice, you must refer to Accountants letter section for more information. Note: Where financials were provided by the applicant to the Bank, Accountants letter / Accountants email advice cannot be used. Where the loan requires income from the related company / self-employed entity to be included in the serviceability assessment refer to: Applications by income source Self-employed activity has made a loss or if it has been identified it cannot service its commitments on its own. Noting that, applicants that have been self-employed for more than 12 months, but less than two full financial years are considered an exception to policy and will require referral to Credit for consideration. These applicants must be able to demonstrate a solid history of experience and expertise in the same industry of the self-employment prior to the commencement of the self-employment.
	If the self-employed entity is trading profitably and meeting all commitments: Include commentary in ApplyOnline assessment notes and Upload the supporting documents (financials, accountants, letter etc) obtained with other income assessment documents. The actual income from the self-employed source does not need to be input in ApplyOnline. Borrowings in the name of the sole trader or partnership must be included for serviceability assessment. Broker / Assessor will not be required to obtain details of company loans and other company commitments, unless it is specifically requested by Credit for loans referred to those areas. Company debts will not be loaded in the serviceability assessment.	If the business is trading at a loss or if it has been identified it cannot service its commitments on its own, you are unable to rely on ‘latest year’ financial information or 'Accountants letter/email advice’, additional documentation will be required. The loss must be reflected in the serviceability assessment. Applicants will need to explain how any ongoing business commitments will be met. It is vital to understand if the individuals are going to be negatively impacted by the business's financial position. Broker / Assessor notes must capture outcomes of the discussion with the applicant. Where the business has been trading for >=2 full financial years, follow requirements in: Applications by income source Where the business has been trading for > 1 year and < 2 years obtain the income verification documents for the period the business has been trading: Personal tax returns supported by: For non-mortgage insured: latest single year ATO notice of assessment; or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal For mortgage insured: each years ATO Notice of assessment; or If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal Note: where an ATO NOA is used, (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); and Partnership tax returns (if a partnership); and Trust and / or Company tax returns (if a company / trust); and financial statements (including Profit and Loss accounts and Balance sheets). You may continue to use the previously obtained financial statements provided they show the same number of years of financial performance corresponding to the tax returns held; and the remaining assessment requirements are as per: Applications by income source
Applicant is self-employed and self-employed entity is a non-trading entity or investment holding vehicle and only the tax returns for the entity are held. Financials / profit loss and balance sheets are not completed for the entity Self-employed income from the non-trading entity includes the below types, where the entity may be wholly or partially owned by the applicant: Directors fees Dividends Undistributed company profit Trust distributions Partnership distributions	This scenario may be accepted by the assessor without referral to Credit where the tax returns of the entity are held supported by an accountants’ letter or accountants’ email advice. Assessors must: Refer to Accountants’ letter for the specific information that must be included on the accountants’ letter / accountants’ email advice; and Enter OBP assessment notes with commentary of the verification outcome. Note: This option can-not be used where: The entity is a sole trader or personal services entity or Where the entity is trading as a business (in any capacity or any turnover amount) or Financials were provided by the applicant to the Bank
Partners from selected companies	For partners from Allens, Binder Dijker Otte – BDO, Clayton Utz, Corrs Chambers Westgarth, Deloitte, Ernst & Young, Gadens, Gilbert & Tobin, Grant Thornton, Herbert Smith Freehills, HWL Ebsworth Lawyers, King & Wood Mallesons, KPMG, McGrath Nicol, Minter Ellison, Norton Rose Fulbright, Pitcher Partners, PKF, PWC, RSM Australia, William Buck Refer to Verifying Income > Rules > Verifying Self-employed income
Medico Sector Lending policy	Self-employed Medical professional applicants who meet eligibility criteria for assessment under Medico Sector Lending policy are permitted to provide a single year of tax returns. Must comply with eligibility rules and Income verification requirements as identified within Special Packages - Medico Sector policy E.g. Where an application is being assessed using Medico sector Lending policy and both applicants are self-employed, the qualifying medical professional could supply a single year of financials and tax returns. The non-qualifying medical professional would be required to provide 2 years of tax returns supported by financial statements showing two years of financial data corresponding to the tax returns provided. Evidence of Australian Business Number registration search to show at least 2 years ABN registration whenever 1 Year financial is used for income verification.
Company* or self-employed applicant has been trading for >1 year and <2 years and income from the company* or self-employed applicant is to be used towards serviceability *Company income includes the below income types from this company, where the company may be wholly or partially owned by the applicant: Directors fees Dividends PAYG	Where an applicant has less than 12 months history, or is newly established, you should discuss the scenario with your dedicated Credit contact to identify if the transaction is eligible for assessment at this time. For the period the entity or self-employed applicant has been trading, obtain the income verification documents as specified within: 2.1.1 Applications by income source Note: Credit may request additional information to assist with assessment of entities / self-employed applicants trading for < 2 years, e.g. accountant prepared interim financials. Applicants that have been self-employed for more than 12 months, but less than two full financial years are considered an exception to policy and will require referral to Credit for consideration. These applicants must be able to demonstrate a solid history of experience and expertise in the same industry of the self-employment prior to the commencement of the self-employment.

2.1.4 Unacceptable self-employed income

Company / business income that is not sustainable (derived from a once off event, including but not limited to: sale of an asset, capital gains, drawing from prior years retained profits). Also see Non-Recurring items.
Income from an entity that may have strike off action recorded or is under external administration.
Company or trust distribution from an unrelated entity (the borrower is not a trustee of the trust nor a director / shareholder of the company). For acceptability of income from these sources refer to Verifying Income policy.
In all instances, foreign self-employed income is not acceptable. Applications may only proceed where Credit approve an exception. It is recommended that you discuss your scenario with your dedicated Credit contact prior to accepting the application from the customer.

2.2 Fully verified self-employed assessment

Where the borrower or applicant type are not eligible for assessment using Fast track self-employed assessment the following rules must be applied:

Income assessment method	Rules
Income assessment method	Non-Mortgage insured	Mortgage insured
Fully verified – 2 year average Also see: Income verification – fully verified self-employed Serviceability calculations, approval conditions and authority level – fully verified self-employed assessment Applications by income source Allowable addbacks Document Standards policy Accountants letter Loan Application and Approval policy	Where there are combined self-employed and PAYG applicants, all applicant(s) income and employment are to be fully verified in line with standard policy requirements. For further information regarding PAYG requirements refer to Verifying Income policy. Where there are multiple self-employed applicants or entities and the applicants receive income from the same self-employed entity or if any of the self-employed entities are inter linked (income moves from one self-employed entity to another), then the income must be assessed using the same assessment method. It is however acceptable to use a different income assessment method when the business entities are completely independent of each other and there is no common flow of income. Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment	Same as non-mortgage insured
Fully verified - Latest year income Also see: Income verification – fully verified self-employed Serviceability calculations, approval conditions and authority level – fully verified self-employed assessment Applications by income source Allowable addbacks Document Standards policy Accountants letter Loan Application and Approval policy	Same as Fully verified– 2 year average > Non-mortgage insured plus: Latest year income may be considered for serviceability assessment where: The latest years income¹ is lower than the prior year income¹ or The latest years income¹ is higher than the prior year income¹ and The increase to income can be confirmed as sustainable. Sustainability is measured through a volatility test which is defined as the 2 years average income is <= 130% of the prior year’s income figure. ( Where the 2 years average income is > 130% of the prior year’s income, refer to Serviceability calculations, approval conditions and authority level - fully verified self-employed assessment.) The following are not eligible to be assessed using Fully verified - Latest year income assessment: Applications assessed using Fast track self-employed assessment policy When the income assessment reflects the business is running at a loss in the latest year ¹ When the business has been trading for < 2 full financial years	Mortgage insured applications are not eligible for assessment using latest year income
Notes: ¹ For a sole trader or partnership this is the “Adjusted Net Profit” and for a company / Trust this is the “Adjusted Net Profit After Tax and Repayments” figure from the self-employed income calculator

2.2.1 Income verification - fully verified self-employed assessment

Where an LMI premium is being funded by the bank (for example during a marketing campaign), self-employed income verification is required to be assessed to mortgage insurance standards. This excludes medical professional customers who meet Medico Sector Lending Policy requirements.
Where rental income is included in the serviceability assessment refer to Rental income – Fully verified self-employed assessment

Also see Fully verified self-employed assessment

Income Documents to be obtained
Income assessment methodIncome assessment methodIncome assessment method	Non-Mortgage insured	Mortgage insured
Fully verified – 2 year average	Last 2 years Personal tax return supported by: latest single year ATO notice of assessment (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal and Last 2 years Partnership tax returns (if a partnership) and for a corporate partnership, Financial Statements¹ (including Profit and Loss Accounts and Balance Sheets) showing two years of financial data corresponding to the tax returns provided and Last 2 years Trust and/or company tax returns and Financial Statements¹- including Profit and Loss Accounts and Balance Sheets (if a company / trust) showing two years of financial data corresponding to the tax returns provided	Last 2 years Personal tax returns supported *by:* *each years* ATO Notice of Assessments (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); or If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal and Last 2 years Partnership tax returns (if a partnership) and for a corporate partnership, Financial Statements¹ (including Profit and Loss Accounts and Balance Sheets) showing two years of financial data corresponding to the tax returns provided and Last 2 years Trust and/or company tax returns (if company / trust) and Financial Statements¹ (including Profit and Loss Accounts and Balance Sheets) showing two years of financial data corresponding to the tax returns provided
Fully verified - Latest year income	Same as Fully verified– 2 year average	Mortgage insured applications are not eligible for assessment using latest year income
Notes: Supporting documents must meet Document Standards policy as well any additional requirements identified within this policy. In some cases, 2 years of financial data may not need to be obtained, for more information refer to Exceptions to providing 2 years tax returns / financials. ¹Financial statements – you may obtain 1-year of financial statements (e.g. Profit and Loss Accounts and Balance Sheets) providing the documents obtained show 2 years of financial data corresponding to the tax returns held.

2.2.2 Rental income - fully verified self-employed assessment

This rental income policy applies to all fully verified self-employed assessment methods including but not limited to:

Fully verified self-employed - 2 year average
Fully verified self-employed - Latest year income

Rental income, expenses and any interest or tax deductibility must align to the owner of the property, to ensure serviceability is correctly calculated. To correctly assess the investment property income and expenses the investment property assessment table (below) must be followed.

Investment property assessment
Scenario	Action
1. Investment property is being purchased in this transaction ( by an individual or by an entity^*)	Rental income is to be verified as per Verifying income > Rules you must apply > Supplementary Income Rental must be loaded in ApplyOnline Related expenses to be loaded in ApplyOnline with the real estate collateral. Refer to Living Expense > Rules you must apply > expense category table. When the borrower is an individual: Enter any rental income tax deduction / negative gearing via ApplyOnline. Refer to Serviceability Assessment > Rules you must apply > Rental income tax deductions for Australian investment properties (Negative Gearing) When the borrower is an entity: Rental income tax deduction / negative gearing is not available
2. Investment property is owned by an individual	Rental income is to be verified as per Verifying income > Rules you must apply > Supplementary Income Rental must be loaded in ApplyOnline Related expenses to be loaded in ApplyOnline with the real estate collateral. Refer to Living Expense > Rules you must apply > expense category table. Enter any rental income tax deduction / negative gearing via ApplyOnline. Refer to Serviceability Assessment > Rules you must apply > Rental income tax deductions for Australian investment properties (Negative Gearing)
3. Investment property owned by an entity^, currently rented, and rented for the entire period* covered by the tax returns, used for serviceability assessment.	The Net rental feature must be used (located within the Serviceability Income Calculator) Capture the gross rent for the investment property from the entity tax return rental schedule only Capture the number of weeks the property was rented from the entity tax return rental schedule The net rental feature will shade the rental income and calculate a rental adjustment figure that must be loaded with the self-employed income and included in the serviceability assessment. Note: Investment property expenses do not need to be captured as are already included in the tax return net profit and property expense floor rate will not apply. Rental income tax deduction / negative gearing is not available. Interest, depreciation (including capital allowance) and any once off expenses can be added back to the entity (do not use the net rental feature for addbacks), weher eplicy allows the addback type. Refer to Allowable addbacks
4. Investment property owned by an entity^, currently rented but rented for only part of the period* covered by the tax returns, used for serviceability assessment. Rental income is not received on a short term basis (e.g. the property is not holiday or student accommodation)	The Net rental feature must be used (located within the Serviceability Calculator) Capture the gross rent for the investment property from the entity tax return rental schedule Capture the number of weeks the property was rented from the entity tax return rental schedule The net rental feature will calculate a rental adjustment figure that must be loaded with the self-employed income and included in the serviceability assessment. The net rental adjustment is based on: annualising the rental income adjust for shading, however an additional 10% rental shading (over and above the standard minimum 20% rental shading) will be included, to account for investment property expenses (irrespective of whether the property was rented for 1 week or 51 weeks of the financial year). the rental income already received will then be subtracted. Note: Investment property expenses do not need to be captured as are already included in the tax return net profit, plus an additional 10% shading and property expense floor rate will not apply. Rental income tax deduction / negative gearing is not available. Interest, depreciation (including capital allowance) and any once off expenses can be added back to the entity (do not use the net rental feature for addbacks), where policy allows the addback type. Refer to Allowable addbacks
5. Investment property owned by an entity^* and currently rented but not rented in the period covered by the tax returns, used in the serviceability assessment. Rental income is not received on a short term basis (e.g. the property is not holiday or student accommodation)	Rental income is to be verified as per Verifying income > Rules you must apply > Supplementary Income Related expenses to be confirmed. Refer to Living Expense > Rules you must apply > expense category table. The Net rental feature (located within the Serviceability Calculator ) must be used The net rental feature will shade the rental income, subtract the investment property expenses, and calculate a rental adjustment figure that is loaded with the self-employed income (in the latest financial year only) as a taxed add back and included in the serviceability assessment. Rental income tax deduction / negative gearing is not available. Interest, depreciation (including capital allowance) and any once off expenses can be added back to the entity (do not use the Serviceability Calculator for addbacks), where policy allows the addback type. Refer to Allowable addbacks
6. Investment property is rented on a short term basis and owned by an entity ^* , currently rented / available for rent on a short term basis, but rented for only part of the period covered by the tax returns, used for serviceability assessment.	The Net rental feature must be used (located within the Self-Employed Income Calculator) Capture the gross rent for the investment property from the entity tax return rental schedule Capture the number of weeks the property was rented from the entity tax return rental schedule The net rental feature will calculate a rental adjustment figure that must be loaded with the self-employed income and included in the serviceability assessment. The net rental adjustment is based on: Gross actual rental income (no annualising) adjust for shading, however an additional 10% rental shading (over and above the standard minimum rental shading) will be included, to account for investment property expenses (irrespective of whether the property was rented for 1 week or 51 weeks of the financial year). the rental income already received will then be subtracted. Note : Investment property expenses do not need to be captured as are already included in the tax return net profit, plus an additional 10% shading. Rental income tax deduction / negative gearing is not available. Interest, depreciation (including capital allowance ) and any once off expenses can be added back to the entity (do not use the net rental feature for add backs) where policy allows the addback type. Refer to Allowable addbacks
7. Investment property is rented on a short term basis and owned by an entity ^* is currently rented / available for rent on a short term basis, but not rented in the period covered by the tax returns , used in the serviceability assessment.	Rental income cannot be used in the serviceability assessment Capture the customer declared investment property expenses The net rental feature will calculate a rental adjustment figure that must be loaded with the self-employed income and included in the serviceability assessment.
^*Note: An entity includes a partnership, company, or trust

2.3 Serviceability calculations and approval conditions - fully verified self-employed assessment

Serviceability will initially be tested based on the standard assessment 2 year average method. (exceptions may apply - refer to 'Exceptions to providing 2 years tax returns / financials' )
Minimum DSC requirements will vary depending on the security or borrower type. For additional information refer to Serviceability Assessment > Rules > Debt Service Coverage Ratio ( DSC )
The income used for serviceability assessment is outlined in the table below:

Income assessment method	Scenario	Income used for serviceability assessment	Approval conditions
Fully verified self-employed – 2 year average Or Fully verified self-employed – Latest year income	Most recent years income is lower than the prior years income.	The most recent year’s income must be used for serviceability.
Fully verified self-employed – 2 year average	When the most recent year’s income is higher than the prior year.	The average of the most recent year and the prior year’s income must be used for serviceability.	For policy rules refer to Fully verified self-employed assessment > income assessment method > Fully verified – 2 year average
Fully verified self-employed – Latest year income	When the latest year’s income is higher than the previous year.	The latest years income may be used for serviceability when the approval conditions and the Fully verified self-employed – Latest year income policy has been met.	Non-mortgage insured only ( Mortgage insured applications are not eligible for assessment using latest year income) Lender /assessors can approve where: the 2 year average income is <= 130% of the prior year's figure; and the appropriate self-employed OVA is held (providing the remainder of the application is within their authority). Where the 2 years average income is > 130% of the prior year’s income then following options are available: Assess serviceability using the Fully verified self-employed assessment > income assessment method > Fully verified – 2 year average ; or Refer the loan application to Credit with supporting rational discussing the change in business profitability and how this is considered sustainable. Refer to Guide to understanding changes to business profitability and recording supporting rational e for Fully verified - Latest year assessment. Credit will review and may either: support and approve within policy, recommend assessment based on a 2 year average; or request further supporting commentary / documentation if appropriate.

2.3.1 Allowable addbacks

Where Addbacks are being used for income assessment the Broker / Assessor must ensure their loan assessment notes identify the addbacks being used and explain why it should be considered.
Note: On loans where LMI is required and addbackss other than Depreciation, Interest, Leasing and Hire purchase are required to meet servicing, such proposals must be referred to the Mortgage Insurer.

2.3.2 Depreciation

Definition

Depreciation is an accounting method for allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset's value has been used up. Depreciation 'expenses' are generally considered not direct costs to the business, hence cash-flow should be available to meet loan repayments.

Note: Depreciation is not an acceptable addback for a Trust entity, given the manner in which a trust utilises depreciation is quite unique and not comparable to other entity types. As a result of the method used by a trust to disburse profits to its beneficiaries, we cannot accurately determine if a beneficiary received a monetary benefit from the depreciation.

When can depreciation be used as an addback for serviceability assessment

What % can I use

When

What do I need to do

100%

The business type must be a sole trader, partnership or company; and
The depreciated assets are under finance and a corresponding liability is evident on the balance sheet.

We permit the addback in this instance because if at a future point in time the asset requires renewal, the applicant may also renew the debt and in our serviceability assessment we have included the existing commitment

Non-mortgage insured applications

Where ApplyOnline or the Serviceability Calculator is the assessment tool:

ensure a commitment has been loaded (refer to Commitments policy for further details about verification requirements)

Mortgage insured applications

Same as non-mortgage insured applications plus, application must be referred to the Credit for consideration.
Credit may choose to allow the use of depreciation in whole or part for serviceability assessment

Depreciation addback percentage which can be used may vary between 0% - 100%

Depreciation addback must be adjusted in line with personal use percentage

The business type must be a sole trader, partnership or company; and
The depreciation is in respect of an income producing asset (that is not under finance) and that asset is required to be maintained / updated to ensure continuance of the income.

Examples of this would include:

Taxi operators applying depreciation on their cab.
Truck operators depreciating their truck/s.
Excavation/Earthmoving operators applying depreciation on machinery.
Restaurant equipment / furnishings or fit out.

In these types of scenarios, the depreciation item claimed should not be added back, as the equipment itself will require maintenance and / or replacement at some point, hence funds will need to be apportioned / set aside to be able to do this.

Non-mortgage insured applications

You must:

contact the applicant and obtain additional information to understand if the assets being depreciated:
- are being used for personal purposes and if so, the percentage used for personal and business use (depreciation addback percentage cannot exceed the business use percentage) and
- the lifespan of these assets and whether these are integral to the daily operation of the business and
Record the outcome of the discussions in loan assessment notes and
Upload to ApplyOnline any supporting documentation such as a depreciation schedule

Mortgage insured applications

Same as non-mortgage insured applications plus, application must be referred to the Credit for consideration.
Credit may choose to allow the use of depreciation in whole or part for serviceability assessment

2.3.3 Amortisation

Amortisation is the deduction of capital expenses over a specific period of time. Similar to depreciation, it is a method of measuring the consumption of the value of goodwill over a period of time. Amortisation can be included as an allowable addbacks.

Note: Amortisation is not an acceptable addback for a Trust entity given the manner in which a trust utilises amortisation is quite unique and not comparable to other entity types. As a result of the method used by a trust to disburse profits to its beneficiaries, we cannot accurately determine if a beneficiary received a monetary benefit from the Amortisation.

2.3.4 Interest (bank borrowings) Leasing or Hire Purchase fixed commitments

Addback type	May be added back where the below conditions are satisfied
Leasing or Hire purchase fixed commitments	The full monthly repayment for the fixed commitment is included as part of the applicants outgoing costs; or The liability has been repaid since lodgement of the financial statements; or The fixed commitment is being refinanced as part of this loan application
Interest	The full monthly repayment for the fixed commitment is included as part of the applicants outgoing costs; or The liability has been repaid since lodgement of the financial statements; or The fixed commitment is being refinanced as part of this loan application

In ApplyOnline, load under appropriate add-back heading e.g. interest or leasing (excludes scenarios where net rental calculation worksheet has been used).

2.3.5 Superannuation (Sole Trader, Partnerships and Company Structures)

A superannuation guarantee cost is only compulsory to a Sole Trader, Partnership that has an external employee or under a company structure.

Though it is not compulsory for self-employed applicants to contribute towards superannuation, in some instances, applicants do make large bulk payments to such funds. Owners of companies often make contributions on their own behalf in excess, of the statutory superannuation guarantee amount.
The superannuation guarantee cost is assessed as a percentage of the salary and the director’s fees (in the case of a company) paid to the employees and company director(s). The amount of any contribution made in excess, of the statutory requirement, may be used as an addbacks. This will only be considered appropriate when the Profit and Loss statement clearly shows payments were made on behalf of the applicants and not the employees and it can be demonstrated that the excess contributions are not required to service any Self-Managed Super Fund (SMSF) borrowings that the self-employed applicant may have.

Sole trader, Partnership
Net profit from the Business	$30,000
Statutory superannuation guarantee amount	Nil
Superannuation paid	$ 5,000
Excess Contribution	$ 5,000
Company (in this example a director’s fee was not paid.)
PAYG Salary from the Company	$30,000
Statutory superannuation guarantee cost at 9.5% Note : the statutory superannuation guarantee cost of 9.5% is used for illustration purposes only. Refer to the Australian Taxation Office for current Super Guarantee rates.	$ 2,850
Superannuation paid	$ 5,000
Excess Contribution	$ 2,150

2.3.6 Non-recurring items

Self-employed applicants may incur significant one-off expenses or income items that are not part of normal business activities. Where one of these items are incurred, for the purposes of the Bank's income assessment, the non-recurring expense should be added back to the net income prior to taxation being calculated and the non-recurring income item, must be subtracted from the net income prior to taxation being calculated.

Example of one-off income:

Capital gain following the sale of an asset.
The profit received from the sale of an asset.
Non-recurring interest.
Employee fringe benefit contribution.
Any grant or boost payment.

Examples of one-off expenses:

The loss realised following the disposal of an asset.
Once off significant bad debt write-off.

Addbacks from Capital accounts are not acceptable for income assessment purposes as they reflect a reduction in the net worth of the entity.

2.3.7 Working Capital

If the business is one that requires working capital, i.e., manufacturing, trading, etc ensure sufficient working capital is available.
If undistributed profits are to be used in the serviceability assessment, consideration needs to be made whether the loss of funds will affect the business / company.

2.4 Fast track self-employed assessment

Fast Track assessment is a simple Self-Employed income assessment method relying on the applicants 2 year’s personal Australian Taxation Office (ATO) Notice of Assessments (NOA's). To assess income under the Self-employed Fast Track income verification method:

The eligibility criteria must be met.
Income from the self-employed applicant is to be verified completely from the applicants personal ATO NOA's, i.e. no further self-employed income documentation (within age of documentation requirements) is to be held or requested, where servicing is met using income from the ATO NOA’s.
An ABN search must be performed on all associated self-employed entities to confirm a minimum of two full financial years self-employment. Refer to completing ABN, business name or company searches

If the applicant is self-employed and also has a second completely independent PAYG job, the PAYG income will also be verified from the ATO NOA’s only. If the PAYG employment commenced after the period covered by the ATO NOAs, and the income is required for serviceability assessment, then Fast Track is not available and one of the Fully verified self-employed assessment policies must be used.

The only exception where income can be considered that is not captured in the ATO NOA’s held is rental income where the rental income commenced, after the financial years covered by the ATO NOA’s provided. In this instance investment property expenses must be identified and included in-line with Living Expenses policy.

When the applicant has investment properties that earned rental income during the ATO NOA period (either part of, or the entire period), then it is acceptable to load a $0 investment property expense for this real estate, as the expenses are already captured in the ATO NOA taxable income figure. In this scenario the following comment, or similar, must be entered as the $0 expense explanation:
“Nil investment property expenses captured as the rental property was owned during the period covered by the ATO NOAs (or part thereof), and the rental expenses are factored into the total taxable income figure sourced from the ATO NOA.”

Notes:

When a property is only rented for part of the period covered by the ATO NOA’s no annualisation of rental income is permitted under Fast Track and there is no expectation to load additional investment property expenses. If rental income of this nature requires annualisation for the serviceability assessment then Fast Track is not available and one of the Fully verified self-employed assessment policies must be used.
When the ATO NOA shows franking credits, no adjustment of the taxable income is required to account for the franking credit. A franking credit must not be added to or subtracted from the Taxable income figure.
When serviceability is assessed under the Fast Track method, a self-employed entity (e.g. company or trust) must not be included separately in the serviceability assessment, and verification of any commitments related to the company and / or Trust (with corporate trustee) is not required.

Exception authorities do not extend to Fast Track eligibility criteria.

2.4.1 Eligibility criteria – Fast track self-employed assessment

Applicant has been Self-employed for more than 2 full financial years; and

Borrower type - individual, joint applicants, individuals as trustee for a trust, joint applicants as trustee for a trust (note: also refer to Eligibility policy)
Income to be assessed from 2 years ATO Notice of Assessments that meet age of document requirements. It is mandatory to hold all pages of the ATO NOAs for Fast Track Self-employed
The ATO Notice of assessments used must be from the period of applicants self-employment
The only self-employed income verification documents that have been provided to the bank or held on file (within age of document requirements) are the ATO NOAs
The self-employed entity(s) from which the applicant derives their income, must have been established and trading for a minimum of two full financial years
Any capital gains income on the ATO NOA are excluded and must be deducted for income assessment
Where rental income commenced, after the financial years covered by the ATO NOA’s:
- Evidence^# is required to confirm the property was acquired, or the property was only rented, after the end of the financial years ATO NOA's held. ( Evidence of the purchase date of the property may be via a Conveyancers Settlement Statement or for existing customers, a prior mortgage application ); and
- Rental income must be assessed inline with Verifying income policy. Refer Verifying Income > Rules you must apply > Supplementary Income
Negative Gearing / Tax deductibility can only be considered where rental income commenced after the financial years covered by the ATO NOA. Where Negative Gearing can be considered refer to Serviceability Assessment > Rules you must apply > Rental income tax deductions for Australian investment properties (Negative Gearing)
Loan is not Mortgage Insured

^#If evidence of the purchase date, or commencement date of the rental contract is unable to be supplied, the rental income is to be removed from the application / serviceability calculation. In addition, no tax deduction is allowed.

2.4.2 Exclusion criteria – Fast track self-employed assessment

Where the following apply the Fast Track process cannot be used:

Application has mortgage insurance
The bank is provided with or holds any self-employed income verification documents (within age of document requirements) other than the ATO NOAs.
Foreign income is received by the applicant
Undistributed company profit is required in addition to the Fast Track income to meet serviceability. Note: Dividends (either from own company or other ASX shares) and / or Trust distribution income included in the applicants’ ATO NOAs is acceptable and should not be adjusted in any way.
Rental income has been entered separately in the loan application and it has been earned in any year covered by the ATO Notice of Assessment provided
Applicant has been self-employed for less than 2 full financial years
ATO Notice of assessments used do not match applicants time as self-employed.

In some cases Credit may decide the application needs to be assessed using one of the Fully verified self-employed assessment policy criteria, where this occurs the applicant will need to provide additional information.

Where applicants are unable to satisfy all of the above conditions the applicant must be assessed using one of the Fully verified self-employed assessment policy criteria.

Note: Where there are multiple self-employed applicants and the applicants receive income from the same self-employed business or if any of the self-employed entities are inter linked ( between the applicants ), then the income must be verified using the same assessment method. It is however acceptable to verify one applicant under Fast Track and another applicant under one of the Fully verified self-employed assessment policies when their business entities are completely independent of each other and the applicants do not receive income from the same entity.

Where 2 or more applicants share investment properties, and they are assessed by different assessment methods (i.e. applicant 1 is Fast Track and applicant 2 is PAYG or applicant 1 is Fast Track and Applicant 2 is Fully verified self-employed) any shared rental income cannot be entered for the non Fast Track applicant to ensure it is not double counted or overinflated. If the non Fast Track applicant’s share of rent is required to meet serviceability then the Fast Track applicant must be assessed using one of the Fully verified self-employed assessment policies.

2.4.3 Serviceability Assessment – Fast track self-employed assessment

The income used for serviceability assessment is outlined in the table below:

Income used for serviceability assessment - Fast track

When most recent year’s income is lower than the prior year, serviceability assessment will use the most recent year’s income.

When the most recent year’s income is higher than the prior year, serviceability will be based on the average of the most recent year’s and the prior year’s income.

2.5 Accountants letter

Accountants letter / Accountants email advice mandatory requirements
An Accountants letter or Accountants email advice may only be used to support the specific assessment methods as per the table below:

Action required In all Instances where a letter / email from the business’s accountant is permitted for use as a supporting document you must: Adhere to the standards outlined in Documents standards policy: Accountants letter Accountants email advice Verify the Accountant’s or Accounting firm’s tax agent / BAS agent registration status is current, using https://www.tpb.gov.au/registrations_search. Upload to OBP the search result. The Tax Practitioner Board (TPB) number may be required to perform this search, so it is preferable for the TPB Number be included on the Accountant Letter / email, however, this is not mandatory provided the registration can still be validated as current via the TPB website above. Validate that the letter has addressed all the below requirements. If the letter does not address all the below criteria or when tax returns / financials for the entity are held the letter is unacceptable and cannot be used.
Assessment method	It must also contain all of the below:
Applicant is self-employed and no income from the related business / self-employed entity is used towards serviceability and Business / self-employed entity is trading Business income includes the below income types, where the business may be wholly or partially owned by the applicant. Directors fees Dividends PAYG (from the business) Undistributed company profit Trust distributions Partnership distributions Sole trader net profit Personal services income	Confirm: That the Accountant has completed the most recent / latest year’s tax returns and / or associated financial statements for the relevant entities subject to the declaration, or Where the business has only recently commenced (within the current financial year) the accountant must confirm: The date the business commenced, and How long they have been acting for the applicant, and That they have been completing the applicant’s BAS since the business commenced, where BAS (partial or full quarter) has been required to have been lodged. Note: If the accountant has not completed the tax returns / financials or BAS, the accountant will have limited financial understanding of the business and the accountant’s letter cannot be used. Confirm that the business / entity(s): Is / are trading profitably; and Has sufficient current earnings from recurring income to meet their ongoing debts (i.e. after all expenses including but not limited to the principal component / fees of any debts, paying wages, superannuation and taxation obligations, without drawing on any retained prior year profits or proceeds, capital gain sale of business assets or reliance on any once off grant, boost payment e.g., COVID etc); and There is no reliance on any income from the applicants (borrower, guarantor, or Apportioned shared commitment) by the business including where there are loans from applicants evident in borrower financial information held, where applicable.
Business / self-employed entity with an active ABN, where: The entity does not trade or has never traded, and Has no current or deferred commitments	Confirm: That they are the applicant’s Accountant and have completed the most recent / latest year’s personal and/or business tax returns, where other trading entity(s) held The applicant’s associated entity(s) names and ABN’s to which the declaration applies. Either the date the business ceased trading or that the business has never traded. The business has no current or deferred commitments / liabilities.
Applicant is self-employed and self-employed entity is a non-trading entity or investment holding vehicle and only the tax returns for the entity are held. Financials / profit loss and balance sheets are not completed for the entity. Self-employed income from the non-trading entity includes the below types, where the entity may be wholly or partially owned by the applicant: Directors fees Dividends Undistributed company profit Trust distributions Partnership distributions	Confirm: That the Accountant has completed the most recent / latest year’s tax returns; and Details of all ongoing liabilities the entity has; and That the entity does not trade or operate as a business in any capacity; and That financials / profit loss & balance sheets are not prepared for the entity.

3. Frequently Asked Questions - FAQs

Question	Answer
My customer was running a lawn mowing franchise in 2017 / 2018 financial year and is now a finance broker in 2018/2019. They have greater than 2 years history of being self-employed and more than 2 years of financials, so why would I need to refer my application to Credit?	The self-employed industry / field is not the same, so this is not considered continuous. This does not qualify under self-employed policy. If an exception is supported, the loan application must be referred to credit with supporting mitigating reasons outlined
If I don't need the income from my customer's company for servicing, why do I need to get the financials?	Financials are required to ensure the entity was not running at a loss, the income paid to the individual is sustainable and has not been paid from an unsuitable source, e.g. as prior year retained profit or profit from sale of an asset.
How would my customer be negatively impacted by their company making a loss? Isn't the company a separate entity?	A trading / operating entity cannot sustain a loss indefinitely. Distributions made to the individual or other entities would not be sustainable so the income would not be acceptable. It is assumed the individual is propping up the entity keeping it afloat attempting to trade out of the loss.
If my tax returns show a dependant, but the customer says they have no dependants, do I need to comment in the assessment notes?	Yes, if your supporting documents indicate a dependant, then your assessment notes are to explain why you have not included the dependant for serviceability assessment. Refer to: Living expenses > Rules > definition of a dependant Loan Application and Approval > Validation of information provided by the customer
How do I know what commitments my business, company or trust have?	There are a number of ways to obtain information about both assets and liabilities (commitments): Customer interview Completion of finance application Review of profit and loss statements and balance sheet Regular outgoings on statements If your supporting documents conflict with the information provided by the customer, then remember to either amend the load or include an explanation in your assessment notes.
If my customer has been trading for less than a year and I don't need the income for serviceability, (because the proposed new loan services on the PAYG applicant’s income only), why does the Bank need information about the self-employed entity and to evidence if the business is trading at a profit?	Even for a newly established entity, there may have been debts or commitments that would impact the household's ability to borrow personally. A new business may not yet, be generating enough income to pay commitments and may be reliant on the PAYG individual helping to fund any shortfall. We want to help customers achieve their financial goals whilst continuing to be responsible lenders.

4. Completing ABN, business name or company searches

To determine if an applicant is an owner or part owner of a Company a Broker should review the applicants Credit Bureau report. This credit bureau report will show any related directorships.

While the Directors of the company have responsibility for the day to day management, we need to also consider who the shareholders are of the company when determining what income we can use in the loan assessment, i.e. share of profit based on being a director and percentage of shareholding. A company search will reflect the applicants current Shareholding of that entity, in addition to documenting any change(s) to shareholders and/or shareholdings since establishment of the company, where applicable.

If the related entity is to a business trading name (e.g. Bluey's convenience store) but not a company (e.g. Blue Star Pty Ltd), then a business name search will reflect the applicant's relationship to the business.

An ABN search can confirm if the ABN is active, how long the ABN has been active and the GST registration status. Complete an ABN search using ABN Look-up via www.abr.business.gov.au.

Where the search result shows the ABN is 'cancelled' or 'in-active':
- Include a comment in AOL and;
- Upload the ABN search to AOL.

If the applicant discloses the entity has commitments or if it is evident via the Bank's systems, the commitments must be included in the serviceability assessment. See example of non- trading entity verified by ABN search

When the application is assessed under Fast Track, an ABN search is required on all self-employed entities the applicant derives an income from, to confirm the self-employed entities have been established and trading for a minimum of two full financial years.

Note: only the ABN search is required under Fast Track, a company directorship search is not required.

5. Guide to understanding changes to business profitability and recording supporting rationale for Fully verified - latest year assessment

It is best practice to record factors relating to the assessment of self-employed / business income in all cases.

When assessing serviceability based on the latest year self-employed income and the two years average income is >130% of the prior years income, it is mandatory to review the business financials and to enter supporting comments to explain:

Why there has been a change from the prior year.
How the change to business profit is sustainable into the future.
Why the income can be used for serviceability assessment.

Supporting comments should refer to the appropriate items in the financials / tax returns where possible and may also be supported by customer conversations and additional supporting documents if appropriate.

There are many factors which can affect the profitability of business income / self-employed applicants. This guide outlines some common scenarios which may be the reason for the change in profitability.

It is not an exhaustive list of scenarios and each source of self-employed income will have its own unique story. These scenarios are provided to help guide you to have an insightful conversation with the borrower about why the business has experienced changes to profitability.

Scenarios
When reviewing the financial information provided by the borrower if the latest years income is higher than the prior year’s income we should try to identify if the change is due to a reduction in expenses or an increase in sales.

Increase in sales When the increase in net profit is due to an increase in sales, a Broker / Assessor must understand how this increase occurred and if this is sustainable. In addition to understanding how a business has increased the net profit, a Broker / Assessor should also consider potential industry or market changes that are likely to have an adverse impact on the business. To use an extreme example, during COVID-19 many restrictions were imposed which had a severe impact to industries such as tourism, retail, and hospitality, just to name a few.
Scenario	Issues to consider / Potential implications	What do I need to do?
Increase in demand for the products / services the business offers	How sustainable is the increase in demand? For Example The business released a new product or service, and the new product / service is now part of the permanent suite of products / services the business offers. The new product / service has proven to be very popular and has resulted in higher trade, with trends in trade showing no signs of slowing demand. If the increase in demand is due to a ‘once off’ sale (including discontinuing a product line and selling the remaining stock at a reduced price), this would not be considered sustainable.	Contact the borrower and ask them what they see as the benefits or disadvantages of the change. In your loan assessment notes explain: Why there has been a change. Include details of the discussion with the customer. How the change to business profit is sustainable into the future. Why the income can be used for serviceability assessment. Upload to ApplyOnline any supporting documentation you may have obtained from the customer.
The business increased the price of its goods / services.	Is the price increase permanent? Is the price increase competitive within the marketplace? Do competitors offer the same or a better product / service at a cheaper price? For example Has the business lost any customers / contracts as a result of the price increase? Usually, a price increase would be intended to be permanent however what if the business competitors offer the same product / service at a reduced cost. If the competitors do not increase their price, then the business may be at risk of losing customers and may need to reduce the price to complete. While the current year may show an increase in net profit this may not be sustainable into the future as customers leave. If the business has not lost any customers as a result, this is a good outcome but what supports the change as being sustainable? To ensure the business would not lose existing contracts, the business explored what their competitors offered. As well as increasing prices they added an extra feature to the product / service. The cost of the extra feature was negligible and factored into the price change. With the enhanced product / service the business has attracted more customers since making the change. They are benefiting from both the increased sales and change to profit margin.

Reduction in expenses When the increase in net profit is a result of a reduction in expenses Brokers / Assessors should seek to understand if the reduction in expenses, is a once off or long-term cost reduction. When the reduction in expenses is a long-term cost reduction, then the loan assessment notes need to address how the reduction is sustainable and if this is expected to have any adverse impacts on the business.
Scenario	Issues to consider / Potential implications	What do I need to do?
The business has relocated premises and secured cheaper rent.	How will the relocation of the business impact the customers? For example The business is a retail outlet and they have moved from a street frontage location on a busy street where they received a lot of walk-in customers. The new premises, has no street frontage and has low foot traffic passing by. What benefits or disadvantages come with moving? Will they save on the rent but need to increase advertising costs to attract customers? Or have they decided they will target more online sales to counter the loss of foot traffic? If the business has fundamentally changed its target market (example: from walk in sales to online sales) then a cautious approach needs to be taken until the change has proven successful and sustainable. If the premises, is a warehouse / storage facility and not a customer facing site, the change of location may not have an adverse impact.	Contact the borrower and ask them what they see as the benefits or disadvantages of the change. In your loan assessment notes explain: Why there has been a change. Include details of the discussion with the customer. How the change to business profit is sustainable into the future. Why the income can be used for serviceability assessment. Upload to ApplyOnline any supporting documentation you may have obtained from the customer.
The business has reduced staff costs or terminated employees.	Can the business generate the same level of sales / turnover with less staff? For example: If the business has terminated a staff member, what job role did that staff member fulfil and who is now completing that work? E.g. If the staff member was the sole or highest achieving salesperson, will the business be able to sell its products / services effectively without this person? If the business owner themselves will take over the role, who will now cover the activities they were previously undertaking? Could there be a loss or run off of existing customers due to loyal customers following the prior sales person? What if the business was a logistics company and the terminated staff member was the sole truck driver, how will deliveries be made?
The business reduced expenses by stopping an expense such as a hire purchase for example.	What did this expense relate to? Did the expense cease because a loan term was completed? Did the business stop hiring / leasing equipment / machinery? For example If the expense related to hiring equipment / machinery, how will the business continue to generate the same level of profit without this equipment / machinery? If a loan term reached completion, has the funded asset also reached the end of its life? Does the asset now need to be replaced?

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

11 November 2021

Links updated

14 December 2021

Changes made due to ‘SAI Global’ name change to “Dye and Durham’ (as advised by Line of Business):
- Replaced text references to ‘SAI Global’ with “Dye and Durham’
- Removed the ‘SAI Global’ logo from the ‘Company Title’ screenshot example. Provider name is not relevant to the purpose of the attachment and removing it will ‘future proof’ for provider changes or provider business name changes

20 February 2022

Change 1
Policy rewrite and Westpac Group alignment
Change 2
Updated the table 2.1.1 “Applications by income source” with the following content

When assessing PAYG (salary or wages) and/or director fees from own company, use the historic PAYG and/or director fee income received from own company (in each separate financial year the income was received). This will typically be located at item 1 the individual personal tax return.

Change 3
Corrected the hyperlink in 2.1.3 “Exceptions to providing 2 years tax returns / financials” Removed the hyperlink to “Verifying ABN is not active and replaced with a link to “Completing ABN, business name or company searches. Also added the following content to 4. Completing ABN, business name or company searches
An ABN search can confirm if the ABN is active, how long the ABN has been active and the GST registration status. Complete an ABN search using ABN Look-up via www.abr.business.gov.au.

Where the search result shows the ABN is 'cancelled' or 'in-active':
- Include a comment in OBP and;
- Upload the ABN search to OBP

If the applicant discloses the entity has commitments or if it is evident via the Bank's systems, the commitments must be included in the serviceability assessment. See example of non- trading entity verified by ABN search

Change 4
Updated the addbacks section to clarify that depreciation / Amortisation is not an acceptable add back for a Trust entity.

3 April 2022

Policy correction
Correction to the “what do I need to do” column of the depreciation add back table:
Old wording
(depreciation addback percentage cannot exceed the personal use percentage)
New wording
(depreciation addback percentage cannot exceed the business use percentage)

22 May 2022

Section ‘Rules> Assessing self-employed applications> Age of documents’
changed from ‘Refer to: Loan Application and Approval > Full application date’
changed to ‘Refer to: Loan Application and Approval > Responsible Lending Start Date’.
Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the ‘Responsible Lending Start Date’

21 August 2022

Deleted references to the ‘Minimum Document Standards Matrix’. The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter. Existing references have been updated to point to the ‘Document Standards’ chapter

2 October 2022

Change 1
Update to content in section 2.2.2 Rental income – fully verified self-employed – 2 year average > Investment property assessment (table)
Scenario 1 - Investment property is being purchased in this transaction ( by an individual or by an entity ^* )
Old
Related expenses to be loaded in AOL with the real estate collateral. Refer to Living Expense policy > Rules you must apply > expense category table.
Enter any rental income tax deduction / negative gearing via AOL. Refer to Serviceability Assessment > rules you must apply > Rental income tax deductions for Australian investment properties (Negative Gearing)
New
When the borrower is an individual:
Enter any rental income tax deduction / negative gearing via AOL. Refer to Serviceability Assessment > rules you must apply > Rental income tax deductions for Australian investment properties (Negative Gearing)
When the borrower is an entity:
Rental income tax deduction / negative gearing is not available
Change 2
Update to content in section 2.2.2 Rental income – fully verified self-employed – 2 year average > Investment property assessment (table)
Scenario 4. Investment property owned by an entity ^* , currently rented but rented for only part of the period covered by the tax returns, used for serviceability assessment.
Change of name to scenario 4, new name
4. Investment property owned by an entity ^* , currently rented but rented for only part of the period covered by the tax returns, used for serviceability assessment.
Rental income is not received on a short term basis (e.g. the property is not holiday or student accommodation)
Change 3
Update to content in section 2.2.2 Rental income – fully verified self-employed – 2 year average > Investment property assessment (table)
5. Investment property owned by an entity ^* and currently rented but not rented in the period covered by the tax returns, used in the serviceability assessment.
Change of name to scenario 5, new name
5. Investment property owned by an entity ^* and currently rented but not rented in the period covered by the tax returns , used in the serviceability assessment.
Rental income is not received on a short term basis (e.g. the property is not holiday or student accommodation)
Change 4
Update to content in section 2.2.2 Rental income – fully verified self-employed – 2 year average > Investment property assessment (table)
New scenario 6 and 7 added

6. Investment property is rented on a short term basis and owned by an entity ^* , currently rented but rented for only part of the period covered by the tax returns, used for serviceability assessment.

The Net rental feature must be used (located within the Self-Employed Income Calculator)
Capture the gross rent for the investment property from the entity tax return rental schedule
Capture the number of weeks the property was rented from the entity tax return rental schedule
The net rental feature will calculate a rental adjustment figure that must be loaded with the self-employed income and included in the serviceability assessment.

The net rental adjustment is based on:
Gross actual rental income (no annualising)
adjust for shading, however an additional 10% rental shading (over and above the standard minimum rental shading) will be included, to account for investment property expenses (irrespective of whether the property was rented for 1 week or 51 weeks of the financial year).
the rental income already received will then be subtracted.
Note : Investment property expenses do not need to be captured as are already included in the tax return net profit, plus an additional 10% shading.
Rental income tax deduction / negative gearing is not available. Interest, depreciation (including capital allowance ) and any once off expenses can be added back to the entity (do not use the net rental feature for add backs) where policy allows the addback type. Refer to Allowable addbacks

7. Investment property is rented on a short term basis and owned by an entity ^* is currently rented but not rented in the period covered by the tax returns , used in the serviceability assessment.

Rental income cannot be used in the serviceability assessment
Capture the customer declared investment property expenses
The net rental feature will calculate a rental adjustment figure that must be loaded with the self-employed income and included in the serviceability assessment.

Change 5
Policy clarification – impacted section 2.3.5 Superannuation (sole trader, partnerships and company structures)
Old
A Superannuation Guarantee Charge is only compulsory to a Sole Trader, Partnership that has an external employee or under a company structure.
Though it is not compulsory for self-employed applicants to contribute towards superannuation, in some instances, applicants do make large bulk payments to such funds. Owners of companies often make contributions on their own behalf in excess, of the Superannuation Guarantee Charge.
The Superannuation Guarantee Charge is assessed as a percentage of the salary and the director’s fees ( in the case of a company ) paid to the employees and company director(s). The amount of any contribution made in excess, of the statutory requirement, may be used as an add-back. This will only be considered appropriate when the Profit and Loss statement clearly shows payments were made on behalf of the applicants and not the employees and it can be demonstrated that the excess contributions are not required to service any Self-Managed Super Fund ( SMSF ) borrowings that the self-employed applicant may have.
New
A superannuation guarantee cost is only compulsory to a Sole Trader, Partnership that has an external employee or under a company structure.
Though it is not compulsory for self-employed applicants to contribute towards superannuation, in some instances, applicants do make large bulk payments to such funds. Owners of companies often make contributions on their own behalf in excess, of the statutory superannuation guarantee amount.
The superannuation guarantee cost is assessed as a percentage of the salary and the director’s fees ( in the case of a company ) paid to the employees and company director(s). The amount of any contribution made in excess, of the statutory requirement, may be used as an add-back. This will only be considered appropriate when the Profit and Loss statement clearly shows payments were made on behalf of the applicants and not the employees and it can be demonstrated that the excess contributions are not required to service any Self-Managed Super Fund ( SMSF ) borrowings that the self-employed applicant may have.
Change 6
Policy clarification – impacted section 2.3.5 Superannuation (sole trader, partnerships and company structures) > example table
Old

Sole trader, Partnership
Net profit from the Business	$30,000
Superannuation Guarantee Charge	Nil
Superannuation paid	$ 5,000
Excess Contribution	$ 5,000
Company (in this example a director’s fee was not paid.)
PAYG Salary from the Company	$30,000
Superannuation Guarantee Charge at 9.5%	$ 2,850
Superannuation paid	$ 5,000
Excess Contribution	$ 2,150

New

Sole trader, Partnership
Net profit from the Business	$30,000
Statutory superannuation guarantee amount	Nil
Superannuation paid	$ 5,000
Excess Contribution	$ 5,000
Company (in this example a director’s fee was not paid.)
PAYG Salary from the Company	$30,000
Statutory superannuation guarantee cost at 9.5% Note: the statutory superannuation guarantee cost of 9.5% is used for illustration purposes only. Refer to the Australian Taxation Office for current Super Guarantee rates.	$ 2,850
Superannuation paid	$ 5,000
Excess Contribution	$ 2,150

Change 7
Policy clarification – impacted section 2.6 Fast track self-employed assessment
Old
Income from the self-employed applicant is to be verified completely from the applicants personal ATO NOA's, i.e. no further income documentation is to be requested, where servicing is met using income from the ATO NOA’s.
New
Income from the self-employed applicant is to be verified completely from the applicants personal ATO NOA's, i.e. no further self-employed income documentation (within age of documentation requirements) is to be held or requested, where servicing is met using income from the ATO NOA’s.
Change 8
Policy clarification – impacted section 2.6.1 Eligibility criteria – fast track self-employed assessment
New dot point added
The only self-employed income verification documents that have been provided to the bank or held on file (within age of document requirements) are the ATO NOAs
Change 9
Policy clarification – Exclusion criteria – fast track self-employed assessment
New dot point added
The bank is provided with or holds any self-employed income verification documents (within age of document requirements) other than the ATO NOAs.
Change 10
In the “ 2.2 Fully verified self-employed assessment ” section;
Deleted
Where there are combined self-employed and PAYG applicants, all applicant(s) income and employment are to be fully verified in line with standard policy requirements. For further information regarding PAYG requirements refer to Verifying Income policy.
Added the “Income assessment method” table
Change 11
2.3 Serviceability calculations – fully verified self-employed standard assessment 2 year average has been re-named to Serviceability calculations, approval conditions and authority level - fully verified self-employed assessment.
The requirement to initially test serviceability based on the standard assessment 2 year average method has been deleted.
“The income used for serviceability assessment is outlined in the table below” has been re written completely.
New content;

Income verification method	Scenario	Income used for serviceability assessment	Approval conditions and authority level
Fully verified self-employed – 2 year average Or Fully verified self-employed – Latest year income	Most recent years income is lower than the prior years income.	The most recent year’s income must be used for serviceability
Fully verified self-employed – 2 year average	When the most recent year’s income is higher than the prior year	The average of the most recent year and the prior year’s income must be used for serviceability	For policy rules refer to Fully verified self-employed assessment > income assessment method > Fully verified – 2 year average
Fully verified self-employed – Latest year income	When the latest year’s income is higher than the previous year	The latest years income may be used for serviceability when the approval conditions and the Fully verified self-employed – Latest year income policy has been met	Non-mortgage insured only ( Mortgage insured applications are not eligible for assessment using latest year income) Lender /assessors can approve where: the 2 year average income is <= 130% of the prior year's figure; and the appropriate self-employed DRA is held (providing the remainder of the application is within their authority). Where the 2 years average income is > 130% of the prior year’s income then following options are available: Assess serviceability using the Fully verified self-employed assessment > income assessment method > Fully verified – 2 year average; or Refer the loan application to Credit with supporting rational discussing the change in business profitability and how this is considered sustainable. Refer to Guide to understanding changes to business profitability and recording supporting rational e for Fully verified - Latest year income assessment. Credit will review and may either: support and approve within policy, recommend assessment based on a 2 year average; or request further supporting commentary / documentation if appropriate.

Change 12
Deleted
2.4 Fully verified self employed assessment – Latest year income and 2.5 Fully verified self employed assessment COVID Recovery (FY2019 income) sections.
Change 13
Serviceability Assessment – Fast track self-employed assessment
Deleted:
the average income is <= 130% of the prior year's figure and ;
Where the average income is > 130% of the prior year figure, the application will refer to Credit
If the application 'refers to Credit' due to 'income >130% of prior year', Credit will review the application and decide if it can continue to proceed using the fast track process. In some cases Credit may decide the application needs to be assessed as a F ully verified self-employed standard assessment - 2 year average application, where this occurs the applicant will need to provide additional information.
Change 14
Accountants letter;
Deleted Fully verified self employed assessment (latest year income) and Fully verified self employed assessment COVID Recovery (FY 2019 income) from the table
Change 15
Guide to understanding changes to business profitability and recording supporting rationale for Fully verified - latest year income assessment;
Deleted;
It is best practice to record factors relating to the assessment of self-employed / business income in all cases, regardless of whether the file is approved within your authority (DRA) or is escalated to Credit for consideration. Including but not limited to when:
average income > 130% of prior year income or;
using the single latest years income for serviceability assessment or ;
Added:
It is best practice to record factors relating to the assessment of self-employed / business income in all cases, regardless of whether the file is approved within your authority (OVA) or is escalated to Credit for consideration.
When assessing serviceability based on the latest year self-employed income and the two years average income is >130% of the prior years income, it is mandatory to review the business financials and to enter supporting comments to explain:
Supporting comments should refer to the appropriate items in the financials/tax returns where possible and may also be supported by customer conversations and additional supporting documents if appropriate.

20 November 2022

Change 1
Under section ‘ Exceptions to providing 2 years tax returns / financials’ > > Partners from selected companies’ included the below companies:

Gilbert & Tobin
Pitcher Partners
Binder Dijker Otte – BDO
William Buck

Change 2

Added a new scenario to the ‘ Exceptions to providing 2 years tax returns / financials’ table

Applicant is self-employed
and
self-employed entity is a non-trading entity or investment holding vehicle
and
only the tax returns for the entity are held. Financials / profit loss and balance sheets are not completed for the entity

Self-employed income from the non-trading entity includes the below types, where the entity may be wholly or partially owned by the applicant:

Directors fees
Dividends
Undistributed company profit
Trust distributions
Partnership distributions

This scenario may be accepted by the assessor without referral to Credit where the tax returns of the entity are held supported by an accountants’ letter or accountants’ email advice.
Assessors must:

- Refer to A ccountants’ letter for the specific information that must be included on the accountants’ letter / accountants’ email advice; and
Enter OBP assessment notes with commentary of the verification outcome.

Note: This option can-not be used where:

The entity is a sole trader or personal services entity or
Where the entity is trading as a business (in any capacity or any turnover amount) or
Financials were provided by the applicant to the Bank

Change 3

Added a new scenario to the ‘ Accountants letter / Accountants email advice mandatory requirements' table

Applicant is self-employed
and
self-employed entity is a non-trading entity or investment holding vehicle
and
only the tax returns for the entity are held. Financials / profit loss and balance sheets are not completed for the entity.

Self-employed income from the non-trading entity includes the below types, where the entity may be wholly or partially owned by the applicant:

Directors fees
Dividends
Undistributed company profit
Trust distributions
Partnership distributions

Adhere to the standards outlined in Documents standards policy:
- Accountants letter
- Accountants email advice

Confirmation that the Accountant has completed the most recent / latest year’s tax returns; and
Detail all liabilities the entity has; and
Confirm the entity does not trade or operate as a business in any capacity or any turnover amount; and
Specifically confirm that financials / profit loss & balance sheets are not prepared for the entity.

Change 4
Updated section ‘Applications by income source > Dividend received from own company and used for serviceability calculations (not using any undistributed company profit)’
Old wording
Not eligible for Fast track assessment, obtain the following income verification documents:

Last 2 years Company tax returns and financial statements (profit loss and balance sheets must be reviewed to identify if Company is trading profitably or at a loss) and

Last 2 years Personal tax returns are required, supported by each years ATO Notice of assessment for mortgage insured applications, or latest single year ATO notice of assessment for non-mortgage insured applications year (whilst preferable to hold all pages of the ATO NOA, minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant).

New wording
Not eligible for Fast track assessment, obtain the following income verification documents :

Last 2 years Company tax returns and financial statements (profit loss and balance sheets must be reviewed to identify if Company is trading profitably or at a loss); and

Last 2 years Personal tax returns are required, supported by:
- For non-mortgage insured:
  - latest single year ATO notice of assessment; or
  - If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal
- For mortgage insured:
  - each years ATO Notice of assessment; or
  - If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal

Note: Where an ATO NOA is used, whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant.

Change 5
Updated section ‘Applications by income source >PAYG income from own company and / or Directors fees from own company only’
Old wording
Where not eligible for fast-track assessment, obtain the following income verification documents:

Last 2 years Trust and / or Company tax returns (to identify if Company is trading profitably or at a loss) and
financial statements (including profit and loss accounts and balance sheets) showing two years of financial data corresponding to the tax returns provided and
Last 2 years Personal tax returns supported by each years ATO Notice of assessment for mortgage insured applications, or latest single year ATO notice of assessment for non-mortgage insured applications (whilst preferable to hold all pages of the ATO NOA, minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant).

New wording
Where not eligible for fast-track assessment, obtain the following income verification documents:

Last 2 years Trust and / or Company tax returns (to identify if Company is trading profitably or at a loss) and
financial statements (including profit and loss accounts and balance sheets) showing two years of financial data corresponding to the tax returns provided; and
Last 2 years Personal tax returns supported by:
- For non-mortgage insured:
  - latest single year ATO notice of assessment; or
  - If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal
- For mortgage insured:
  - each years ATO Notice of assessment; or
  - If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal

Note: Where an ATO NOA is used, whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant).
Change 6
Updated section ‘ Exceptions to providing 2 years tax returns / financials > Applicant is self-employed and no income from the related business / self-employed entity is used towards serviceability and
Business / self-employed entity is trading’
Old wording
Obtain the following income verification documents:

Latest single year personal tax returns supported by ATO Notice of Assessment (if self-employed as a sole trader or personal services income only) (whilst preferable to hold all pages of the ATO NOA, minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); and

New wording
Obtain the following income verification documents:

Latest single year personal tax returns supported by:
- ATO Notice of Assessment (if self-employed as a sole trader or personal services income only); or
- If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal (if self-employed as a sole trader or personal services income only)

Note: Where an ATO NOA is used, whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant);
Old wording
Where the business has been trading for > 1 year and < 2 years obtain the income verification documents for the period the business has been trading:

Personal tax returns supported by each years ATO notice of assessment for mortgage insured applications, or latest single year ATO notice of assessment for non-mortgage insured applications (whilst preferable to hold all pages of the ATO NOA, minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); and

New wording
Where the business has been trading for > 1 year and < 2 years obtain the income verification documents for the period the business has been trading:

Personal tax returns supported by:
- For non-mortgage insured:
  - latest single year ATO notice of assessment; or
  - If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal
- For mortgage insured:
  - each years ATO Notice of assessment; or
  - If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal
Note: Where an ATO NOA is used, (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant);

Change7
Updated section ‘ Income verification - fully verified self-employed assessment > Fully verified 2 year average‘

Old wording
Non-Mortgage insured:

Last 2 years Personal tax return supported by latest single year ATO notice of assessment (whilst preferable to hold all pages of the ATO NOA, minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant) and

New wording
Non-Mortgage insured:

Last 2 years Personal tax return supported by:
- latest single year ATO notice of assessment (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); or
- If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal

Change 8
Updated section ‘ Income verification - fully verified self-employed assessment > Fully verified 2 year average‘
Old wording
Mortgage insured:

Last 2 years Personal tax returns supported by each years ATO Notice of Assessments (whilst preferable to hold all pages of the ATO NOA, minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant) and

New wording
Mortgage insured:

Last 2 years Personal tax returns supported by:
- each years ATO Notice of Assessments (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed applicant); or
- If ATO NOA/s has not issued: latest Australian Tax Return lodgement extract from MyGov Portal

19 February 2023

Change 1
Update to wording in section 2.3.1 Allowable addbacks
Old wording
Where Add-backs are being used for income assessment the broker / assessor must ensure their loan assessment notes identify the add-back being used and explain why it should be considered.
Note: On loans where LMI is required and add-backs other than Interest, Leasing and Hire purchase are required to meet servicing, such proposals must be referred to the Mortgage Insurer.
New wording
Where Add-backs are being used for income assessment the broker / assessor must ensure their loan assessment notes identify the add-back being used and explain why it should be considered.
Note: On loans where LMI is required and add-backs other than Depreciation, Interest, Leasing and Hire purchase are required to meet servicing, such proposals must be referred to the Mortgage Insurer.

Change 2
Update to content in section 2.3.2 Depreciation (mortgage insured applications)
Old wording

What % can I use

When

What do I need to do

100%

The business type must be a sole trader, partnership or company; and
The depreciated assets are under finance and a corresponding liability is evident on the balance sheet.

Non-mortgage insured applications

Where OBP or the Company / Trust income calculator is the assessment tool:

ensure a commitment has been loaded (refer to Commitments policy for further details about verification requirements)

Mortgage insured applications

same as non-mortgage insured applications plus, application will be outside of a lenders authority to approve. Application must be referred to the Mortgage insurer for consideration. Where the remainder of the application is within your authority you can refer direct to the Mortgage Insurer. Where the remainder of the application contains either Bank policy exceptions or exceeds your authority, the application must first be referred to Credit.
Mortgage insurer may choose to allow the use of depreciation in whole or part for serviceability assessment

Depreciation addback percentage which can be used may vary between 0% - 100%

Depreciation addback must be adjusted in line with personal use percentage

The business type must be a sole trader, partnership or company; and
The depreciation is in respect of an income producing asset (that is not
under finance) and that asset is required to be maintained / updated to ensure continuance of the income.

Examples of this would include:

Taxi operators applying depreciation on their cab.
Truck operators depreciating their truck/s.
Excavation / Earthmoving operators applying depreciation on machinery.
Restaurant equipment / furnishings or fit out.

Non-mortgage insured applications

You must:

contact the applicant and obtain additional information to understand if the assets being depreciated:
- are being used for personal purposes and if so, the percentage used for personal and business use (depreciation addback percentage cannot exceed the business use percentage) and
- the lifespan of these assets and whether these are integral to the daily operation of the business and
Record the outcome of the discussions in loan assessment notes and
Upload to OBP any supporting documentation such as a depreciation schedule

Mortgage insured applications

same as non-mortgage insured applications plus, application will be outside of an assessor / lenders authority to approve. Application must be referred to the Mortgage insurer for consideration. Where the remainder of the application is within your authority you can refer direct to the Mortgage Insurer. Where the remainder of the application contains a policy exception or exceeds your authority, the application must first be referred to Credit.
Mortgage insurer may choose to allow the use of depreciation in whole or part for serviceability assessment

New wording

What % can I use

When

What do I need to do

100%

The business type must be a sole trader, partnership or company; and
The depreciated assets are under finance and a corresponding liability is evident on the balance sheet.

Non-mortgage insured applications

Where OBP or the Company / Trust income calculator is the assessment tool:

ensure a commitment has been loaded (refer to Commitments policy for further details about verification requirements)

Mortgage insured applications

same as non-mortgage insured applications plus, application will be outside of a lenders authority to approve. Application must be referred to Credit for consideration.
Credit may choose to allow the use of depreciation in whole or part for serviceability assessment

Depreciation addback percentage which can be used may vary between 0% - 100%
Depreciation addback must be adjusted in line with personal use percentage

The business type must be a sole trader, partnership or company; and
The depreciation is in respect of an income producing asset (that is not
under finance) and that asset is required to be maintained / updated to ensure continuance of the income.

Examples of this would include:

Taxi operators applying depreciation on their cab.
Truck operators depreciating their truck/s.
Excavation / Earthmoving operators applying depreciation on machinery.
Restaurant equipment / furnishings or fit out.

Non-mortgage insured applications

You must:

contact the applicant and obtain additional information to understand if the assets being depreciated:
- are being used for personal purposes and if so, the percentage used for personal and business use (depreciation addback percentage cannot exceed the business use percentage) and
- the lifespan of these assets and whether these are integral to the daily operation of the business and
Record the outcome of the discussions in loan assessment notes and
Upload to OBP any supporting documentation such as a depreciation schedule

Mortgage insured applications

same as non-mortgage insured applications plus, application will be outside of an assessor / lenders authority to approve. Application must be referred to Credit for consideration.
Credit may choose to allow the use of depreciation in whole or part for serviceability assessment

Change 3
Update the wording in section 2.1.1 Applications by income source
Old wording

Income Scenario	Additional requirements
Applicant has PAYG income from a Business wholly or partially owned by their spouse	Refer to: PAYG applicant as per Verifying income > Rules > Family employee

New wording

Income Scenario

Additional requirements

Applicant has PAYG income from a Business wholly or partially owned by their spouse, and

The applicant’s spouse is a co-borrower / income guarantor or assessed under Apportioned Household Expenses and Commitments, on the new loan

The applicant may be assessed as:

PAYG applicant as per Verifying income > Rules > Family employee, or

The same as a self-employed applicant, where assessed using the same self-employed income assessment method used to verify the applicant’s spouses' income, e.g. fully verified, Fast Track

Applicant has PAYG income from a Business wholly or partially owned by their spouse, and

The applicant’s spouse is not a co-borrower / income guarantor or assessed under Apportioned Household Expenses and Commitments, on the new loan

The applicant must be assessed as:

PAYG applicant as per Verifying income > Rules > Family employee

Change 4
Updated wording in section ‘2.5 Accountants letter’
Old wording

Assessment method	Where a letter / email from the business’s accountant is permitted for use as a supporting document, it must contain all of the below:
Applicant is self-employed and no income from the related business / self-employed entity is used towards serviceability and Business / self-employed entity is trading Business income includes the below income types, where the business may be wholly or partially owned by the applicant. Directors fees Dividends PAYG (from the business) Undistributed company profit Trust distributions Partnership distributions Sole trader net profit Personal services income	Adhere to the standards outlined in Documents standards policy: Accountants letter Accountants email advice Confirmation that the Accountant has completed the most recent / latest year’s tax returns and / or associated financial statements for the relevant entities subject to the declaration, or if the business has only recently commenced (within the current financial year) the accountant must: State date of business commencement and Confirm when they started acting for the applicant and Confirm they have been completing the applicant’s BAS since the business commenced. Note: If the accountant has not completed the tax returns / financials or BAS, the accountant will have limited financial understanding of the business and the accountant’s letter cannot be used. Confirm that the business / entity(s) in question: Is / are trading profitably; and Have sufficient current earnings to meet their debts (after all expenses including but not limited to the principal component / fees of any debts, paying wages, superannuation and taxation obligations) without drawing on any retained prior year profits or proceeds, capital gain sale of business assets or reliance on any once off grant, boost payment (e.g., COVID etc); and There is no reliance on any income from the applicants (borrower, guarantor, or Apportioned shared commitment) by the business including where there are loans from applicants evident in borrower financial information already provided.
Business / self-employed entity does not trade and has no current or deferred commitments identified. Entity has an ‘active’ ABN.	Adhere to the standards outlined in policy Documents standards policy: Accountants letter Accountants email advice Confirmation of the applicant’s name and any associated entity(s) names, including ABN’s to which the declaration applies. Confirmation that the Accountant was the accountant for the business if it previously traded. Confirm the date the business ceased trading, or if the business has never traded the accountant must confirm this. Confirm the business is not trading & that the business has no current or deferred commitments / liabilities.
Applicant is self-employed and self-employed entity is a non-trading entity or investment holding vehicle and only the tax returns for the entity are held. Financials / profit loss and balance sheets are not completed for the entity. Self-employed income from the non-trading entity includes the below types, where the entity may be wholly or partially owned by the applicant: Directors fees Dividends Undistributed company profit Trust distributions Partnership distributions	Adhere to the standards outlined in Documents standards policy: Accountants letter Accountants email advice Confirmation that the Accountant has completed the most recent / latest year’s tax returns; and Detail all liabilities the entity has; and Confirm the entity does not trade or operate as a business in any capacity or any turnover amount; and Specifically confirm that financials / profit loss & balance sheets are not prepared for the entity.
Action required Following the receipt of the Accountant’s letter or Accountants email advice, Lenders / Assessors must in all cases: Verify the Accountant’s or Accounting firm’s tax agent / BAS agent registration status is current, using https://www.tpb.gov.au/registrations_search . Upload to OBP the search result. The Tax Practitioner Board (TPB) number may be required to perform this search, so it is preferable for the TPB Number be included on the Accountant Letter / email, however, this is not mandatory provided the registration can still be validated as current via the TPB website above. Validate that the letter has addressed all of the above requirements. If the letter does not address all of the above criteria or when tax returns / financials for the entity are held the letter is unacceptable and cannot be used.

New wording

Assessment method	Where a letter / email from the business’s accountant is permitted for use as a supporting document, it must contain all of the below:
Applicant is self-employed and no income from the related business / self-employed entity is used towards serviceability and Business / self-employed entity is trading Business income includes the below income types, where the business may be wholly or partially owned by the applicant. Directors fees Dividends PAYG (from the business) Undistributed company profit Trust distributions Partnership distributions Sole trader net profit Personal services income	Adhere to the standards outlined in Documents standards policy: Accountants letter Accountants email advice Confirm: That the Accountant has completed the most recent / latest year’s tax returns and / or associated financial statements for the relevant entities subject to the declaration, or Where the business has only recently commenced (within the current financial year) the accountant must confirm: The date the business commenced, and How long they have been acting for the applicant, and That they have been completing the applicant’s BAS since the business commenced, where BAS (partial or full quarter) has been required to have been lodged. Note: If the accountant has not completed the tax returns / financials or BAS, the accountant will have limited financial understanding of the business and the accountant’s letter cannot be used. Confirm that the business / entity(s): Is / are trading profitably; and Has sufficient current earnings from recurring income to meet their ongoing debts (i.e. after all expenses including but not limited to the principal component / fees of any debts, paying wages, superannuation and taxation obligations, without drawing on any retained prior year profits or proceeds, capital gain sale of business assets or reliance on any once off grant, boost payment e.g., COVID etc); and There is no reliance on any income from the applicants (borrower, guarantor, or Apportioned shared commitment) by the business including where there are loans from applicants evident in borrower financial information held, where applicable.
Business / self-employed entity with an active ABN, where: The entity does not trade or has never traded, and Has no current or deferred commitments	Adhere to the standards outlined in policy Documents standards policy: Accountants letter Accountants email advice Confirm: That they are the applicant’s Accountant and have completed the most recent / latest year’s personal and/or business tax returns, where other trading entity(s) held The applicant’s associated entity(s) names and ABN’s to which the declaration applies. Either the date the business ceased trading or that the business has never traded. The business has no current or deferred commitments / liabilities.
Applicant is self-employed and self-employed entity is a non-trading entity or investment holding vehicle and only the tax returns for the entity are held. Financials / profit loss and balance sheets are not completed for the entity. Self-employed income from the non-trading entity includes the below types, where the entity may be wholly or partially owned by the applicant: Directors fees Dividends Undistributed company profit Trust distributions Partnership distributions	Adhere to the standards outlined in Documents standards policy: Accountants letter Accountants email advice Confirm: That the Accountant has completed the most recent / latest year’s tax returns; and Details of all ongoing liabilities the entity has; and That the entity does not trade or operate as a business in any capacity; and That financials / profit loss & balance sheets are not prepared for the entity.
Action required Following the receipt of the Accountant’s letter or Accountants email advice, Lenders / Assessors must in all cases: Verify the Accountant’s or Accounting firm’s tax agent / BAS agent registration status is current, using https://www.tpb.gov.au/registrations_search . Upload to OBP the search result. The Tax Practitioner Board (TPB) number may be required to perform this search, so it is preferable for the TPB Number be included on the Accountant Letter / email, however, this is not mandatory provided the registration can still be validated as current via the TPB website above. Validate that the letter has addressed all of the above requirements. If the letter does not address all of the above criteria or when tax returns / financials for the entity are held the letter is unacceptable and cannot be used.

26 March 2023

Change 1

Section 2.1 has been updated to “Identifying and Assessing self-employed applications” – and content added from Verifying Income Chapter re-write:

When the applicant became a director;
The percentage of shareholding;
If the business is trading / non-trading; and
If the business is profitable or able to able to service it's own commitments

¹ Where the applicant is either an Independent director or an Executive director they are not considered to be the business owner and do not need to be assessed as a self-employed applicant.

Independent director: A director that does not have a vested interest i.e. they are not a shareholder and the directorship is not held in a business that is owned (shareholding > 0%) or controlled (directorship) by a spouse or family member (e.g. child or parent) or a subsidiary entity of the director or director's spouse / family member.
Executive director: A director that does have a vested interest (a minor % shareholding of <=5%) however limited to also being an independent PAYG employee. E.g. the CEO of Westpac is a director but also an independent PAYG employee (PAYG employee of a business that is not their own business).

For further information about how to investigate directorships refer to Completing ABN, business name or company searches.

21 May 2023

Change 1

Update to “Rental income - fully verified self-employed assessment”.

Scenario table 3 and 4 updated to show where Property Expense floor will not be used in calculations as expense already captured and verified from Tax return Net Profit

Change 2

2 July 2023

Change 1
Update to “Accountants Letter” to simplify and re-order content to appear above the table.
There has been no change to policy intent or requirements

20 August 2023

Change 1
Fast Track clarification
Added to: Eligibility criteria – Fast track self-employed assessment

The ATO Notice of assessments used must be from the period of applicants self-employment.

Added to: Exclusion criteria – Fast track self-employed assessment

ATO Notice of assessments used do not match applicants time as self-employed.

Attachments

Attachment

03.16 2.1.3 Company title example.pdf

Attachments

Attachment

03.16 Non-trading entity verified by ABN search.pdf

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03.17 Serviceability Assessment

Policy ID

03.17

Policy Name

Serviceability Assessment

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Debt Service Coverage Ratio
2.2 Income
2.3 Living Expenses
2.4 Commitments
2.4.1 Default shared commitment rule
2.5 Apportioned Household expenses and shared commitments and Apportioned shared commitments
2.5.1 Apportioned household expenses and shared commitments - Spousal same household
2.5.2 Apportioned shared commitment rule
2.5.3 Serviceability Repayment Amount
2.5.4 Commitment being refinanced using loan funds
2.5.5 Excluded mortgage liability
2.5.6 Amended current commitment
2.6 Notional Rent expense
2.7 Study and Training Support Loan Repayment Income Thresholds 2022-2023
2.8 Household Expenditure Measure (HEM)
2.8.1 Monthly Household Expenditure Measure - Table
2.8.2 Monthly Household Expenditure Measure - Geographic Location
2.8.3 Customer declared living expenses- compared to HEM
2.8.4 Customer declared living expenses are less than 70% of HEM
2.8.5 Customer declared living expenses- not compared to HEM
2.8.6 Investment Property Expense floor
2.9 Reverse Mortgage Loans
2.10 Consumer Mortgage Loan - Serviceability Repayment Amount
2.10.1 Serviceability Assessment Rate (SAR) - Mortgage
2.10.2 Benchmark Repayment Amount-Mortgage
2.11 Parental leave-use of 'return to work' income
2.12 Rental income tax deductions for Australian investment properties (Negative Gearing)
2.13 Serviceability Assessment: Changes to financial circumstance
2.14 Debt To Income (DTI) Ratio
2.14.1 DTI Ratio Calculation
2.14.2 High DTI Ratio - Commentary and Referral to Credit
2.15 Judgemental assessment

1. About this policy

1.1 Why this policy?

Purpose	Serviceability assessment or capacity to service a loan/s forms one part of the unsuitability assessment as required under our Responsible Lending obligations. This policy identifies the standards for assessing serviceability.
Applicable to	Consumer mortgage applications where a borrower is seeking any of: new loan loan increase servicing / variation activity requiring a serviceability assessment
Exclusions	This policy does not apply to a Bridging ICAP loan with no end debt
Associated policies	You may also need to refer to other lending policy rules, including but not limited to: Commitments Guarantees Living Expenses Validation of information provided by the customer Verifying Income If the application requires mortgage insurance, where required refer to: Lenders Mortgage Insurance

2. Rules you must apply

2.1 Debt Service Coverage Ratio

Definition	For consumer mortgage loans assessed in OBP, the borrower(s) and (any) income guarantor(s) capacity to service all debt is rated using the ‘Debt Service Coverage’ ratio measurement (DSC). Refer to ‘Minimum DSC required’
DSC Calculation	(Shaded Total Net Income – Total Expenses) / (Serviceability repayment amountused for existing commitments + new loans)
‘Total expenses’ for the purpose of the DSC calculation	Customer declared living expenses not comparable to HEM, plus the higher of: HEM or HEM comparable declared living expenses
Minimum DSC required	Feature	Non- Mortgage Insured	Mortgage insured
	LVR ≤ 80%	1.00	1.00
	LVR > 80%	1.00	1.00
	Foreign income	1.15	N/A
	Student accommodation	1.25	N/A
	Building loan - Owner Builder	1.00	NA

2.2 Income

Only income from a borrower(s) or an income guarantor(s) can be used. Refer to Eligibility and Guarantees.

Also refer to:

2.3 Living Expenses

Borrower(s) and income guarantor(s) are required to declare all household living expenses that are in place at the time of the application, as well as those which will be in place after settlement of their loan.
Also refer to:

Customer declared living expenses –compared to HEM
Customer declared living expenses –not compared to HEM
Living Expenses
Guarantees
Apportioned household expenses and shared commitments - Spousal same household

2.4 Commitments

The borrower(s) and any income guarantor(s) commitments are considered in serviceability.
All existing commitments are to be reflected in the application, regardless of whether they are to be closed, reduced or continued after the loan activity being assessed

Also refer to:

Commitments
Guarantees

2.4.1 Default shared commitment rule

Where an existing commitment is shared with another borrower ( i.e. >1 borrower on the existing commitment ) the ‘Default shared commitment rule’ requires 100% of that commitment amount and it’s ‘Serviceability Repayment Amount’ be included in the consumer mortgage application (aggregate) level serviceability assessment

e.g. if a new loan / loan increase is in a sole name, but an existing commitment is held in joint / multiple names, the full amount of the existing commitment and it’s associated ‘Serviceability Repayment Amount’ must be applied against the sole borrower.

If serviceability fails due to the ‘Default shared commitment rule’, the application may be considered using the following options:

Apportioned household expenses and shared commitments - Spousal same household
Apportioned shared commitment rule

2.5 Apportioned household expenses and shared commitments and Apportioned shared commitments

2.5.1 Apportioned household expenses and shared commitments - Spousal same household

Definition	This policy option allows the borrower’s serviceability to be assessed using their apportioned share of: household living expenses (both HEM comparable and non – HEM comparable expenses), and repayments for any existing shared commitments (i.e. debts / liabilities)
Eligibility	The borrower’s spouse must not be a borrower or income reliant guarantor on the consumer mortgage application being assessed, and The borrower and the borrower’s spouse must live at the same address, and The only borrowers on any existing shared commitments must be the borrower and the borrower’s spouse This policy option is not available when: the application is processed outside of OBP, or the existing commitment or proposed consumer mortgage application being assessed has a company co-borrower, or borrowers on the existing shared commitment are not spouse only or do not fit the banks definition of a household, or either borrower of the existing commitment or proposed consumer mortgage application being assessed earns foreign income Where the borrower is not eligible for this policy, they may meet the requirements for the Apportioned shared commitments rule
Apportioning the household living expense or commitment	The portion of the expense or commitment repayment used in the serviceability assessment is based on the borrower’s contribution to the total household income. i.e. calculating the borrower’s income as a percentage of the total household income (i.e. borrower + spouse income), and applying that same percentage to the shared household living expenses and commitments. When OBP is the assessment tool, the apportioned household expenses and shared commitments calculations will be automatically completed (including HEM value). Lenders / assessors do not need to manually adjust the borrower’s percentage ownership or amount of an expense or a commitment.
Evidencing the borrower’s contribution to the total household income	The borrower’s contribution to household income must be evidenced by verifying both the borrower and non-borrower’s (borrower’s spouse) income. The non-borrower (borrower's spouse) must be verified using the following income verification method: PAYG must be verified using standard income verification policy. Refer to Verifying Income policy. Self Employed non-borrower must be verified using Fast Track self-employed assessment. The full Fast Track policy including ‘Eligibility’ and ‘Exclusion’ criteria applies. Refer to Self Employed Applicants policy.
DTI	The entire commitment value (higher of balance/limit) is used in the DTI calculation (not the apportioned value)
HEM	The HEM band calculation is determined on total household income and does not change when using the apportioned household expense policy.
Verification	The broker must: Comply with Commitments policy Sight the non-borrower spouse privacy and consent, identification, and income verification documents AND: upload documentation (to OBP) confirming : The borrower’s spouse resides at the same address as the borrower; and The name of the borrower’s spouse matches the employee’s name on the income documents used to verify the borrower’s spouse income, including the ATO notice of assessment where the borrower’s spouse is self-employed.
Related Serviceability Assessment policy	Default shared commitment rule Apportioned shared commitment rule Serviceability repayment amount Benchmark repayment amount – Mortgage Benchmark repayment amount calculation – New and existing internal mortgage Benchmark repayment amount calculation – External existing mortgage

2.5.2 Apportioned shared commitment rule

Definition	This policy option: can be used when serviceability fails based on the ‘Default shared commitment rule’ allows the borrower’s or income reliant guarantor’s serviceability to be assessed using their apportioned share of repayments for an existing shared commitment (i.e. debts / liabilities)
Eligibility	The borrower(s) or income guarantor(s) (WBC only) share an existing commitment with another borrower who is not: The spouse of the borrower and not a co-borrower on the new loan or loan variation being assessed, or An income guarantor (WBC only) on the new loan or loan variation being assessed Apportioned shared commitment rule is not available when: the application is processed outside of OBP The new loan or shared commitment has a company co-borrower Foreign income is used in the serviceability assessment Any co-borrower / income guarantor (WBC only) of the shared commitment resides outside of Australia The existing commitment is shared between spouses only: If the borrower and non-borrower spouse reside at the same address, refer to Apportioned household expenses and shared commitments – Spousal same household policy If the borrower and non-borrower spouse reside at different addresses, the borrower has to take on the full responsibility for both their own as well as the spouse’s portion of the debt.
Calculation	The applicant’s apportioned share of the commitment used in serviceability assessment is based on the highest of the below categories
	Category	Description
	A. Repayment percentage	The percentage of the total minimum required loan repayment that the borrower(s) or income guarantor(s) plus their spouse (if their spouse is not a party on the new consumer mortgage application or loan variation being assessed) are liable. This is a customer declared percentage. E.g. Existing borrowers = Borrower 'A' + Borrower 'A' Spouse (who is not a party on the new consumer mortgage application or loan variation being assessed) + Other borrower who is not a party on the new consumer mortgage application or loan variation being assessed. The declared repayment percentage for Borrower 'A' plus their spouse was 50%. Note: the declared percentage is below the borrower percentage in this scenario.
	B. Borrower Percentage	The borrower(s) or income guarantor ( plus their spouse (if their spouse is not a party on the new consumer mortgage application or loan variation being assessed) as a percentage of total borrowers. E.g. Existing borrowers = Borrower 'A' + Borrower 'A' Spouse (who is not a party on the new consumer mortgage application or loan variation being assessed) + Other borrower who is not a party on the new consumer mortgage application or loan variation being assessed. Borrower 'A' plus their spouse represent 66.66% of total borrowers (This percentage is based on the equal distribution of the commitment amongst all borrowers on the existing commitment)
	C. Asset ownership percentage (Only applies where an asset secures the existing facility)	The borrower(s) or income guarantor(s) plus their spouse’s ownership of any assets securing the existing commitment This is a customer declared percentage E.g. Existing borrowers = Borrower 'A' owns 20% + Borrower 'A' Spouse owns 60% (if their spouse is not a party on the new consumer mortgage application or loan variation being assessed) + Other borrower who is not a party on the new consumer mortgage application or loan variation being assessed owns the remaining 20%. Borrower 'A' plus their spouse own 80% of the asset securing the existing facility Note: in this scenario the asset ownership percentage is higher than the repayment percentage and the borrower percentage.
Example	Using the examples above, if: 100% of the associated ‘Serviceability Repayment Amount’ under the ‘Default shared commitment rule’ is $3,000, then the associated ‘Serviceability Repayment Amount’ if using the ‘Apportioned shared commitment rule’, would be $2,400 using C. Assets ownership percentage of 80%, as this is the highest percentage in the above examples.
DTI	The entire commitment value (higher of balance/limit) is used in the DTI calculation (not the apportioned value)
Verification	The broker must: Comply with Commitments policy
Related Serviceability Assessment policy	The commitment type must allow an apportioned serviceability repayment amount. To identify if the commitment is eligible to be apportioned, refer to following sections in this chapter: Serviceability repayment amount Benchmark repayment amount – Mortgage Benchmark repayment amount calculation – New and existing internal mortgage Benchmark repayment amount calculation – External existing mortgage

2.5.3 Serviceability Repayment Amount

The Serviceability Repayment Amount is the repayment amount which is ultimately used within the serviceability assessment. The repayment amount is determined by the type of liability and can be either:

Benchmark Repayment Amount - refers to repayment value which has been calculated by the Bank for serviceability purposes only
Customer Declared Contracted Repayment Amount - refers to the contracted repayment amount for the commitment as declared by the customer
The higher of the commitment current balance or limit is used in the Benchmark Repayment Amount calculation, except where the below apply:
- Commitment being refinanced using loan funds
- Amended current commitment
Loans originated concurrently, or existing loans with a concurrent loan activity, it is important that the correct repayment is assigned to the associated liability in each application

Commitment Type	Benchmark Repayment Amount calculation		Serviceability Repayment Amount Monthly figure	Can Apportioned shared commitment rule be applied?	Additional rules / information
Business / Commercial loan not secured by mortgage for secured by mortgage - Refer Consumer Mortgage Loan-Serviceability Repayment Amount	Principal and Interest using: Higher of declared interest rate or 7.67% pa Remaining Principal and Interest term Higher of limit/balance		Higher of: Customer Declared Contracted Repayment Amount Benchmark Repayment Amount	Yes	Only include in ApplyOnline if debt is in personal names. Business loans which are existing secured mortgage liabilities are to be entered against the property
'Buy Now Pay Later' commitments from providers: Afterpay Laybuy Sezzle Deferit PayPal Payin4 Klarna PayItLater StepPay	NA - as $0 payment is applicable for serviceability purposes		$0 payment is applicable for serviceability purposes	No
'Buy Now, Pay Later commitments' from providers other than: Afterpay Laybuy Sezzle Deferit PayPal Payin4 Klarna PayItLater StepPay	‘Buy Now Pay Later - Fixed Term’ Refer to Glossary	N/A	Customer Declared Contracted Repayment Amount	No
	‘Buy Now Pay Later - Revolving Term’ Refer to Glossary	3.8% of higher of limit / balance	Benchmark Repayment Amount	No
Cards which do not require full repayment each month May include: Credit cards Store cards Charge cards	3.8% of higher of limit/balance		Higher of: Customer Declared Contracted Repayment Amount Benchmark Repayment Amount		Brokers are not permitted to reflect a lower limit based on historical behaviour or exclude facilities for non-usage. Also refer to ‘Cards with an active ‘Flexible Payment Option (FPO)’ limit'
Cards which do require full repayment each month May include: Credit cards Store cards Charge cards	NA - as $0 payment is applicable for serviceability purposes		$0 payment is applicable for serviceability purposes	NA - as $0 payment applies for serviceability purposes	Also refer to: ‘Cards with an active ‘Flexible Payment Option (FPO)’ limit' Commitments > Rules you must apply
Cards with an active ‘Flexible Payment Option (FPO)’ limit	3.8% of higher of Flexible Payment Option (FPO) limit /balance		Higher of: Customer Declared Contracted Repayment Amount Benchmark Repayment Amount	Yes	Also refer to: Commitments > Rules you must apply
Centrelink debt	N/A		Customer Declared Contracted Repayment Amount	No	Also refer to: Commitments > Rules you must apply
Consumer mortgage loans	Refer to Consumer Mortgage Loan-Serviceability Repayment Amount Note: The loan processing system will calculate the repayments for the loan being sought
Hire purchase	NA		Contracted Repayment Amount	Yes
Line of Credit (unsecured) May include: Flexi Loans	3.8% of higher of limit/balance		Benchmark Repayment Amount	Yes
Leases	NA		Customer Declared Contracted Repayment Amount, being the contracted repayment amount for the finance portion of the lease Balloon payment is not included in serviceability, on the basis that balloon will be covered by the return of the asset at the end of the lease agreement	Yes
Margin loans	1% of balance		Higher of: Customer Declared Contracted Repayment Amount Benchmark Repayment Amount	Yes	Margin loan statements dated within the last 2 months are required to confirm the balance used in calculating the repayment. Any income from the share portfolio is to be verified in terms of the Verifying Income policy. Refer Commitments > Rules you must apply
Overdraft	3.8% of higher of limit/balance		Higher of: Customer Declared Contracted Repayment or Benchmark Repayment Amount	Yes
Personal loans	Principal and Interest using: 10.97% interest rate pa Remaining Principal and Interest term* Higher of limit/balance Where the term field is left blank, the remaining term will default to 12 months Note*: In all cases, where there is a Balloon payment applicable, it will not be included in the Benchmark Repayment Amount calculation, on the basis that balloon amount will be covered by the return of the asset at the end of the loan agreement		Higher of: Customer Declared Contracted Repayment Amount; or Benchmark Repayment Amount	Yes
Other loans	3.8% of higher of limit/balance		Benchmark Repayment Amount	Yes
Rental expense or Board expense Refer to Glossary for definition of a: Boarder Renter Note: In OBP outgoing rent / board is categorised as an expense (non-discretionary)	N/A		The higher of either: 100% of the actual monthly expense (it is acceptable for the declared amount to be equal to or greater than $0) Notional Rent expense *Note: Exclusion of notional rent is only available under limited circumstances, refer Notional rent expense	No	Borrower's residential housing status is defined as 'Rent', 'Board' or 'Live with parents' and they will not be residing in the security collateral after purchase or final drawdown When multiple tenants are on a lease, it is acceptable for the borrower’s share of the actual monthly expense to be loaded as percentage of the total contracted rent. Excludes where rent / board expense is shared with a spousal partner (then the borrower and their spouse’s combined ownership of the expense must be entered). Refer to Apportioned household expenses and shared commitments -Spousal same household policy and scenarios at the bottom of this table. Verifying rent / board expense: In OBP outgoing rent / board is categorised as an expense (non-discretionary) and is required to be verified. For information about how to verify outgoing declared rent and / or outgoing declared board refer to Commitments policy
Store account	3.8% of higher of limit/balance		Higher of: Customer Declared Contracted Repayment Amount Benchmark Repayment Amount	Yes	If the account must be cleared in full each month, the requirements are as per ‘Cards which do require full repayment each month’
Study and Training Support Loans eg HELP, SSL, ABSTUDY SSL, TSL, SFSS, HECS	STSL Repayment Income multiplied by the corresponding STSL repayment rate ‘Repayment Income’ used for this calculation is: Gross shaded declared taxable income less negative gearing deductions less the higher of (customer declared investment property costs or 10% of gross unshaded rental income)		Benchmark Repayment Amount	No	Any outstanding Study and Training Support Loans must be recorded as a commitment, even if the income level is insufficient to trigger a repayment amount. Repayments are not to be deducted from income figures.
Tax Bill Refer to Glossary for definition	Not included in serviceability assessment as the payment is not yet due (it is a bill not a debt) Follow Commitments policy
Tax Debt Refer to Glossary for definition	Type A: A formal payment plan is in place with the Tax Office Assessed at 100% of the monthly commitment (per payment arrangement) where the payment/s are consistent in amount and frequency. Where this does not apply, assess as below A ‘standard’ payment plan arrangement can also involve: a higher initial payment, e.g. 10% of the total debt remaining (excluding the final) payments of consistent frequency and amount e.g. $198.83 per fortnight a final payment which is the lowest payment and sees the debt repaid in full, e.g. $180.29 In this case, the payment is assessed at 100% of the consistent payment (2. above), reflected as monthly If the payment plan arrangement differs to the above (e.g. every payment amount differs or payment frequency differs), the payment amount used for serviceability is to be the monthly average of all remaining payments Type B: A formal payment plan is NOT in place with the Tax Office No lending or approval (In Principle Approval) is available Follow Commitments > Rules > Tax Debt Type B-rules and verification
Scenarios – Outgoing rent or outgoing board Where the borrower and their spouse (non-borrower on the new loan) rent a property together, then the total contracted rental amount and 100% ownership of the expense must be entered against the borrower. Where Apportioned household expense and shared commitments – Spousal same household policy is being utilised, you will need to include the entire rental outgoing amount as an expense. The system will automatically calculate the borrower’s percentage of the rental outgo to be used in the serviceability. Include notes in the application to describe the scenario clearly for the Assessor. Where the borrower and their spouse (non-borrower on the new loan), rent a property with 1 other person, then the borrower’s and their spouse’s share of the total contracted rent must be entered, e.g. 3 tenants on the lease, then the borrower’s and their spouse’s share of the rent is 66%. This can be entered against the borrower as: 66% of the total contracted rental outgo amount and 100% expense ownership, or The total contracted rental outgo amount and 66% expense ownership Where Apportioned household expense and shared commitments - Spousal same household policy has been applied, t he system will automatically calculate the borrower’s percentage of the rental outgo shared with their spouse, there is no requirement to manually calculate the borrower’s share of the rental expense. The borrower and their spouse rent a property and are applying for a new loan in joint names. The total contracted rent may be loaded in full against either borrower, or split between both borrowers, providing the total contracted rental outgo is entered and the combined expense ownership reflects 100%. Apportioned household expense and shared commitments - Spousal same household policy does not apply in this instance as it is a joint borrower application. The borrower rents a property with 2 other people (non-spousal), who are not co-borrowers on the new loan application. It is acceptable to enter the borrower’s share of the total contracted rent based on the number of tenants on the lease, e.g. 3 tenants on the lease, then the borrower’s share of the rent is 33%. This can be entered as: 33% of the total contracted rental outgo amount and 100% expense ownership, or The total contracted rental outgo amount and 33% expense ownership The borrower and co-borrower (non-spousal) on the new loan application rent a property together and are both on the lease. An amount or expense ownership percentage equivalent to 50% of the total contracted rental outgo must be entered against each borrower, i.e. this can be entered as: 50% of the total contracted rental outgo amount and 100% expense ownership against each borrower, or The total contracted rental outgo amount and 50% expense ownership against each borrower

2.5.4 Commitment being refinanced using loan funds

Scenario

Payment amount used for serviceability

Additional requirements

Any commitment is being cleared and closed using loan funds¹

The payment is not included

The current commitment position (pre clearance) must be loaded in ApplyOnline
The current commitment payment (pre clearance) must be loaded in ApplyOnline

Refer Serviceability Repayment Amount

Verification as per Commitments

Any commitment is being reduced using loan funds¹

The payment on the lower limit can be used, if the reduction will result in a reduced payment

The current commitment position (pre reduction) and the resulting liability position (post reduction) must be loaded in ApplyOnline
The resulting payment (post reduction) is to be loaded in ApplyOnline

Refer Serviceability Repayment Amount

Verification as per Commitments

Legend
¹Refer to Eligibility policy which lists certain commitments which may not be cleared and closed, or reduced from loan proceeds, e.g. Tax Debts, Tax Bills and Margin Loans.

2.5.5 Excluded mortgage liability

The 'Exclude Liability' option is only available:

for new loans and loan increases
for mortgage liabilities (internal or external)
when the scenario, additional requirements and verification requirements detailed in the below table are met

Where serviceability is met without excluding the liability, this option does not need to be applied.

Scenario

Payment amount used for serviceability

Additional requirements

Verification requirements

A mortgage liability is to be cleared and closed independently¹ by the customer via the associated property sale, after Unconditional Approval but prior to or simultaneous with drawdown/settlement

The payment is not included²

The current liability position (pre clearance) must be loaded in ApplyOnline
The current liability payment (pre clearance) must be loaded in ApplyOnline

Refer Payment amount used for serviceability

The customer is required to confirm if the liability is to be cleared and closed:
from the sale of the associated property prior to the drawdown of the new loan/loan to be increased, or
from sale of the associated property via a simultaneous settlement
Assessment notes are to capture details of the discussion with the customer, including how the liability is to be cleared
Load ApplyOnline with the current details of the facility and details of discussion with customer.

Evidence of the liability clearance is required after Unconditional Approval but prior to drawdown /settlement (or settlement booking)

Internal liability²
Internal systems may be used to evidence clearance, via one of the below methods:

Loan account closure (e.g. for a loan to be closed before settlement/drawdown)
Settlement booking for excluded liability

Note: The settlement/drawdown date of the new loan or loan increase may not be prior to the expected settlement date of the excluded liability.

External liability²
Evidence clearance via one of the below methods:

Loan account closure statement (e.g. for a loan to be closed before settlement/drawdown)
Settlement statement detailing expected settlement date and payment to that lender

Note: The settlement/drawdown date of the new loan or loan increase may not be prior to the expected settlement date of the excluded liability

Stamped letter from external financial institution confirming the loan closure (e.g. for a loan to be closed before settlement/drawdown)

Legend
¹'Independently by the customer' means that the customer is not using the loan funds to facilitate the clearance and closure or reduction

²St George Bank Group and RAMS are considered to be external providers

2.5.6 Amended current commitment

A current commitment position may only be amended:

for new loans and loan increases
when the scenario, additional requirements and verification requirements detailed in the below table are met

Scenario	Policy rule	Additional requirements	Verification requirements
'Buy Now Pay Later - Fixed Term' commitment / order, where its contracted clearance date is after Unconditional Approval but prior to drawdown / settlement Notes: This option is not available for ‘Buy Now Pay Later - Revolving Term' This option does not need to be applied where: standard policy allows the use of $0 repayment serviceability is met on the current position	The repayment is not included	The current commitment balance must be loaded in ApplyOnline. The declared repayment can be loaded as $0 in ApplyOnline. Enter application comments: explaining why the declared payment amount was entered as $0 confirming the contracted minimum payment amount confirming how the contracted clearance date was evidenced	Verification requirements must be met prior to Unconditional Approval: The contracted clearance date of each commitment/order is to be verified via any document³from the provider which displays: A. provider logo or name B. account / commitment identifier and/or account holder name C. evidence of the contracted clearance date (this may be evidenced via the number of payments remaining when the frequency of payments is known) If the document format is ‘Written text within the body of an email’⁴: B and C are required and the email must be issued from the provider's email system (not a public email address e.g. 'gmail') and the email must be sent directly from the provider to the Broker Remaining verification requirements as per Commitments Verification documentation must be imaged and held in the loan file
Any liability will be cleared and closed independently by the customer¹, prior to Unconditional Approval Note: This option does not need to be applied where: standard policy allows the use of $0 repayment serviceability is met on the current position	The repayment is not included	The current commitment position (pre clearance) must be loaded in ApplyOnline The current commitment payment (pre clearance) must be loaded in ApplyOnline Closure must be verified prior to Unconditional Approval Assessment notes are to capture details of the discussion with the customer, including how the liability is to be cleared.	Verification requirements must be met prior to Unconditional Approval: Internal liability² Comprehensive Credit Bureau Report (CCR) or Internal systems or document listed for external commitment may be used to evidence that the commitment has been closed. Verification documentation must be imaged and held in the loan file (excluding the CCR) External liability² Comprehensive Credit Bureau Report (CCR) or Any document³ from the provider which displays: A. provider logo or name B. account / commitment identifier and / or account holder name C. evidence that the commitment has been closed Where a document from a provider is used to confirm that the commitment has been closed, there is no requirement for this document to meet the maximum age of documents requirement for that document, i.e. the document may exceed 2 months If the document format is ‘Written text within the body of an email⁴: B and C are required and the email must be issued from the provider's email system (not a public email address e.g. 'gmail') and the email must be sent directly from the provider to the Broker
Any liability will be reduced independently by the customer¹, prior to Unconditional Approval Note: This option does not need to be applied where: serviceability is met on the current position	A payment on the lower limit can be used for serviceability if the reduction will result in a reduced payment	The resulting liability position (post reduction) can be loaded in ApplyOnline The resulting payment (post reduction) can be loaded in ApplyOnline Reduced position must be verified prior to unconditional approval	Verification as per Commitments must be met prior to Unconditional Approval Supporting evidence is to be obtained by the broker and submitted with the lending file.
Any liability will be cleared and closed or reduced independently by the customer¹, after Unconditional Approval but prior to drawdown/settlement AND It does not comply with a scenario detailed within this policy	The commitment may not be amended. Standard policy applies
Legend ¹'Independently by the customer' means the customer is not using the loan funds to facilitate the clearance and closure or reduction
² SGB, BoM, BSA and RAMS are considered to be external providers
³Examples include but are not limited to: a statement, screen image, letter, email
⁴A standalone document attached to an email is not ‘written text in the body of an email’. Refer to Document Standards > Acceptable and unacceptable document formats, delivery methods and suppliers

2.6 Notional rent expense

Definition

Where:

A borrower or income guarantor is Renting, Boarding or Living with Parents at the time of application, and they:
- Will not be residing in the security collateral after purchase or drawdown, a minimum notional rental amount will be applied to the serviceability assessment. Refer to ‘Borrower Type’ in table below.
- Will be residing in the security collateral after purchase or drawdown, notional rent will not apply. This includes where a property is under construction, and it will be occupied by the borrower(s) upon completion.

Refer to Glossary for definition of a:

Boarder

Renter

Verification

Refer to Commitments policy > Customer commitments:

Outgoing board
Outgoing rent

Notional rent Rule

Borrower Type	Residential status	Declared outgo	Rule
Individual	Living with parents or other boarding arrangement²	Borrower has declared $0 or greater outgoing rent / board amount.	Notional rent WILL apply to the individual and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied at an applicant level
	Rental arrangement²
	Rental arrangement Borrower lives in a rental property and rental amount is verified through one of the acceptable documents	Borrower has declared $0 outgoing rent / board amount	Notional rent WILL NOT apply
		Borrower has declared greater than $0 outgoing rent / board	Notional Rent WILL apply to the individual and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 per month applied to the applicant
Joint with spouse¹	Living with parents or other boarding arrangement ² Both borrowers living with the same parent(s) or in the same boarding arrangement	Borrowers have declared $0 or greater outgoing rent / board	Notional Rent WILL apply at household level and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 per month applied at household level
	Rental arrangement ² Both borrowers living in the same rental property
	Living with parents or other boarding arrangement² Each borrower living at a different address, either with parents or other boarding arrangement	Borrowers have declared $0 or greater outgoing rent / board	Notional Rent WILL apply to each applicant and CANNOT be excluded from serviceability assessment Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied at an applicant level
	Rental arrangement² Borrowers are not living in the same rental property
Joint with non-spouse	Living with Parents or other boarding arrangement ² Borrower lives with parents or other boarding arrangement	Borrowers have declared $0 or greater outgoing rent / board	Notional Rent WILL apply to each applicant and CANNOT be excluded from serviceability assessment Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied at an applicant level
	Rental arrangement² Borrowers living in a rental property (may be the same or different address)
	Living with spousal partner² Borrower(s) live in their spousal partner's home and Borrower(s) is not an owner of that property and Spouse is / is not a co-borrower or income guarantor (WBC only) on the loan	Borrower(s) has declared $0 outgoing rent / board	Notional rent WILL NOT apply
		Borrower has declared greater than $0 outgoing rent / board	Notional Rent WILL apply to the individual and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied to the individual
Legend	¹ Spouse = married or de facto ² Borrower does not reside in a property which they already own, and they will not be residing in the security property after purchase or drawdown

2.7 Study and Training Support Loan Repayment Income Thresholds 2023-2024

Repayment Income Thresholds table
Repayment Income	Repayment Rate
Below $51,550	Nil
$51,550 - $59,518	1.00%
$59,519 - $63,089	2.00%
$63,090 - $66,875	2.50%
$66,876 - $70,888	3.00%
$70,889 - $75,140	3.50%
$75,141 - $79,649	4.00%
$79,650 - $84,429	4.50%
$84,430 - $89,494	5.00%
$89,495 - $94,865	5.50%
$94,866 - $100,557	6.00%
$100,558 - $106,590	6.50%
$106,591 - $112,985	7.00%
$112,986 - $119,764	7.50%
$119,765 - $126,950	8.00%
$126,951 - $134,568	8.50%
$134,569 - $142,642	9.00%
$142,643 - $151,200	9.50%
$151,201 and above	10%

2.8 Household Expenditure Measure (HEM)

Definition	The HEM, developed by the Melbourne Institute, represents a broad based estimated level of absolute basic and discretionary expenditure for modern Australian households and is produced Quarterly. The HEM is applied by the loan origination system and other serviceability assessment tools
Used for	It is an index used by the Bank to set the minimum surplus rule for serviceability. May be used for the allocation of living expenses within an application —see Monthly Household Expenditure Measure Table
Categorised according to	Borrower income band Geographical location of the borrower’s place of residence (including overseas residence) Marital status Number of dependants (refer to Living Expenses policy)
Rules	The geographical location is based on the borrower’s residential postcode post loan settlement - see Monthly Household Expenditure Measure - Geographic location. The post settlement postcode is mandatory to calculate HEM.  If the application is an In Principal Approval, the post settlement postcode is to be captured as accurately as possible. Applicant's gross income for the HEM band is calculated based on the total: Gross annual salary / wages income (unshaded) *plus* Gross annual rental income (unshaded) *less* the higher of (customer declared investment property costs or 10% of gross unshaded rental income) *less* investment loan interest costs (where negative gearing has been used) *plus* All other gross annual income (unshaded)
Household definition	Refer to Glossary

2.8.1 Monthly Household Expenditure Measure - Table

Minimum surplus requirements are set out below based on HEM Quarter information shown in the HEM Tables. Source: Melbourne Institute.

The HEM table includes a split by applicant’s *household income, geographical location, marital status and number of dependants.

To manually calculate the HEM value:

Calculate

Gross annual salary / wages income (unshaded) plus
Gross annual rental income (unshaded) less investment property operating costs/expenses less investment loan interest costs (where negative gearing has been used) plus
all other gross annual income (unshaded)

Determine if applicants post settlement postcode is classified as ‘HEM Remote postcode’ or not
To determine the applicable HEM value, go to the Monthly Household Expenditure Measure Table taking into account:

Income as calculated above at step 1.
Geographical location based on the applicant’s post settlement postcode from step 3.
Marital status
Number of dependants*In the case of ‘Joint with Spouse’ applicants living in the same household, a combined HEM household income is used to determine the HEM band to be used. For other applicant’s, the individual HEM household income is used to determine the applicable HEM band.

The table below provides details of how the HEM values apply.

Marital Status	Spouse’s Status	HEM Table
Single / Divorced / Widowed / Separated / Undisclosed	N/A	Use table 1 (Single)
Married / De Facto	Spouse is neither a borrower or an income guarantor on the loan being assessed	Use table 2 (Joint)
	Spouse is a borrower or an income guarantor on the loan being assessed and living in the same household	Use table 3 (Joint with Spouse)
	Spouse is a borrower or an income guarantor on the loan being assessed and living in a different household	Use table 1 (Single)

HEM tables

For household incomes greater than $614k gross per annum the loan origination system platform will extrapolate the HEM value using the following calculation:

(Household Income amount / Mid-point of top HEM band) x (Top band HEM value – Second Top band HEM value) + Second Top band HEM value).

2.8.2 Monthly Household Expenditure Measure - Geographic Location

HEM Remote postcode listing

Where postcode is listed treat as ‘Remote Location’ in HEM calculation.

Where postcode is not listed treat as ‘Rest of Australia' in HEM calculation.

Overseas

Remote Location / Australian average postcode segregation does not apply and all overseas postcodes are treated as ‘Rest of Australia'.

2.8.3 Customer declared living expenses –compared to HEM

For the purposes of assessing the borrower(s) and (any) income guarantor(s) capacity to repay the Bank, the higher of Household Expenditure Measure (HEM) and Customer Declared 'Living Expenses compared to HEM' per household will be used.

Refer to Living Expenses > Living Expenses compared to HEM

2.8.4 Customer declared living expenses are less than 70% of HEM

When the total of the borrower’s declared 'Living Expenses compared to HEM' are less than 70% of HEM at application level, brokers / assessors must:

Discuss the declared level of expenses with the applicant(s) noting that they appear relatively low. (Refer to Living Expenses > Conflicting information)
For all expense categories, undertake any relevant / appropriate scrutiny of account or transactional information, and make further enquiries where any information is identified which conflicts with the customer declared expenses
- Ensure any expense fields entered as $0 had commentary added to explain why the expense does not apply to the applicants
Record the outcome of these discussions with the applicant(s) in the loan origination system to document the rationale behind why the expenses are low. Refer to Rational examples below.
It is not a requirement to obtain further supporting documents to specifically validate this information.

Rational examples

Satisfactory rationale examples

Unsatisfactory rationale examples

Customer declared living expenses are < 70% of HEM, customer has confirmed expenses are low due to:

currently focusing on saving for construction in the future
both applicants are working from home with scheduled breaks, they can pick and drop their kids to school which allow them to save from Out of School Hours Care (OSHC) costs
living at home with parents and do not pay any other insurances or utilities
confirmed with customer that Customer declared expenses are accurate to their everyday spending, review of information held supports conversation

Expense check complete
Discussed expenses with customer
Ok to proceed

2.8.5 Customer declared living expenses – not compared to HEM

Refer to Living Expenses > Living Expenses compared to HEM

Investment property costs - refer to Living Expenses not compared to HEM> Expense categories - Investment Property Costs (Including Insurance)

Where the serviceability assessment includes self-employed income, refer to Self-employed Applicants > Rental income – Fully verified self-employed assessment and Rental Income – Fast track self-employed assessment

2.8.6 Investment Property Expense Floor

An investment property expense floor will be used for serviceability for residential properties that earn long term rental income.
The investment property costs used for serviceability will be assessed on the higher of:

Customer declared investment property costs: OR
10% of Gross Rental Income

Investment Property Expense floor does not apply for:

Short term rental income
Defence Housing Authority (DHA) rental Guarantee
NRAS security under a Head Lease structure
Commercial properties

2.9 Reverse Mortgage Loans

Definition	A reverse mortgage is designed for people aged over 60 years or older using the equity in the Owner Occupied property as security, to advance funds. The borrower is not required to make repayments, interest and fees compound and add to the principal amount borrowed. Normally the loan is repaid in full when the borrower (or deceased estate) sells the security.
Verification	Applications involving an ongoing (not clearing or excluded) existing Reverse Mortgage loan must be referred to credit for acceptance. Credit manager referral is required to validate: That the repayment used for serviceability (being $0 or Interest Only) is appropriate, taking into consideration: Whether the loan has matured Whether the loan will be maturing in the very near term Whether it is reasonable to extend further borrowing to a customer with an ongoing existing Reverse Mortgage Loan
Supporting Information	Detail explaining why the borrower is seeking additional borrowings as a standard loan product when they have an existing Reverse Mortgage loan
Supporting Documentation requirements	A copy of the associated loan contract is to be provided

2.10 Consumer Mortgage Loan - Serviceability Repayment Amount

Reference/Acronym	Definition
LIR	Loan interest rate
Final Rate	Loan interest rate (LIR) +/- life of loan rate adjustments / and loan discounts, and excluding Short term / Honeymoon discounts
PI	Principle and interest
PIF	Principle, interest and fees
IO	Interest Only
ICAP	Interest Capitalised
SAR	Serviceability Assessment Rate

2.10.1 Serviceability Assessment Rate (SAR) - Mortgage

For new and existing consumer mortgage products only, an interest rate buffer and floor rate are considered in the Benchmark Repayment Amount calculation applied to the mortgage commitment, and the interest rate applied is the Serviceability Assessment Rate (SAR).

Interest Rate	Policy rules
Buffer rate	The buffer rate is determined by the Bank; it reflects the potential for interest rate increases and seeks to ensure that potential increases in interest rates do not adversely impact on a borrower’s capacity to repay a loan. Effective 29 October 2021 the buffer rate is 3.00%p.a.
Floor rate	The Bank maintains a minimum floor rate which is used in conjunction with the buffer rate. The floor rate is the lowest benchmark rate that the Bank has set for testing a customer’s ability to repay the loan. Note: The floor rate is also internally referred to as the 'Minimum Credit Assessment Rate (MCAR)' Effective 9 October 2020 the floor rate is 5.05% p.a.
Serviceability Assessment Rate (SAR)	The SAR refers to the interest rate which is applied in the Benchmark Repayment Amount calculation. If the final rate on the loan plus the interest rate buffer of 3.00% p.a. is less than the floor rate, then the floor rate is applied as the SAR. If the final rate on the loan plus the interest rate buffer of 3.00% p.a. is greater than the floor rate, then the actual rate on the loan plus the interest rate buffer is applied as the SAR
Note: A modified SAR may be applied to applications to refinance an existing mortgage (internal or external), where the application meets all eligibility criteria and conditions under Streamlined Refinance

Examples:

Scenario	Final rate on loan	+ Buffer Rate for SAR	= Final Rate + Buffer for SAR	Floor rate	SAR
1	2.0%	3.00% pa	5.00%	5.05%	5.05% I.e. the higher floor rate applies
2	2.05%	3.00% pa	5.05%	5.05%	5.05% I.e. the floor rate and final rate +interest rate buffer is the same.
3	4.0%	3.00% pa	7.00%	5.05%	7.00% I.e. higher final rate plus interest rate buffer applies.

2.10.2 Benchmark Repayment Amount - Mortgage

The Benchmark Repayment Amount is used as the Serviceability Repayment Amount for mortgages.

The below table details the period, interest rate (SAR) and repayment method in Benchmark Repayment Amount calculation for mortgages.

Benchmark Repayment Amount calculation – New and existing internal¹ mortgage
Scenario	Condition	Assessment Period	Interest Rate (SAR)	Commitment amount	Repayment method	Eligible for an apportioned Serviceability Repayment Amount? Must also meet the ‘Apportioned shared commitment rule’
PI Loan (Variable)		Remaining Total Loan Term	Higher of: Final Rate at the beginning of the PI LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
PI Loan (Fixed)	Remaining Total Loan Term is greater than Remaining Fixed Term	Remaining Total Loan Term	Higher of: Final Rate at the beginning of Variable PI LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
PI Loan (Fixed)	Remaining Total Loan Term is equal to Remaining Fixed Term	Remaining Total Loan Term	Higher of: Final Rate at the beginning of Fixed LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
IO Loan (Variable)	Remaining Total Loan Term is greater than Remaining IO Term	Remaining Total Loan Term minus Remaining IO Term	Higher of: Final Rate at the beginning of Variable PI LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
IO Loan (Variable)	Remaining Total Loan Term is equal to Remaining IO Term	Remaining Total Loan Term	Higher of: Final Rate at the beginning of Variable IO LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
IO Loan (Fixed)	Remaining Total Loan Term is greater than Remaining IO Term	Remaining Total Loan Term minus Remaining IO Term	Higher of: Final Rate at the beginning of Variable PI LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
IO Loan (Fixed)	Remaining Total Loan Term is equal to Remaining IO Term Remaining Fixed Term is equal to Remaining IO Term	Remaining Total Loan Term	Higher of: Final Rate at the beginning of Fixed IO LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
IO Loan (Fixed)	Remaining Total Loan Term is equal to Remaining IO Term Remaining Fixed Term is less than Remaining IO Term	Remaining Total Loan Term	Higher of: Final Rate at the beginning of Variable IO LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
Equity Access Loan (EAL)– WBC Product (Secured Line of Credit)		240 months Note: All EALs are Line of Credit loans with no contracted term	Higher of: Final Rate at the beginning of Variable IO LIR plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes-for existing mortgage
Bridging Loan - New Where Bridging loan is not ‘new’ refer to ‘ Bridging / Relocation – Existing ’ Note: any residual (ongoing) liability is to be to be assessed separately	ICAP Note: I/O not available via OBP	NA	NA	Higher of balance or limit	$0 The loan and capitalised interest is to be repaid by property sale proceeds	NA
Bridging / Relocation - Existing Note: Any residual (ongoing) liability is to be to be assessed separately	ICAP or I/O	No lending or approval (including ‘In Principle Approval’) is available if the application involves an existing Bridging Loan that is not being cleared using loan funds (refinance) or customer funds prior to drawdown of the new loan (non-refinance). For a clearing Bridging / Relocation loan (ICAP or I/O), refer to: Commitment being refinanced using Loan funds > Any liability is being cleared and closed using loan funds Excluded mortgaged liability > A mortgage liability is to be cleared and closed independently by the customer via the associated property sale, after Unconditional Approval but prior to or simultaneous with drawdown / settlement Amended current commitment > Any liability will be cleared and closed independently by the customer, prior to Unconditional Approval
Secured overdraft	Secured by a consumer mortgage loan security	NA	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	IO	Yes-for existing mortgage
Legend ¹ RAMS mortgages are treated as external

Benchmark Repayment Amount calculation – External¹ existing mortgage
Scenario	Condition	Assessment Period	Interest Rate (SAR)	Commitment amount	Repayment method	Eligible for an apportioned Serviceability Repayment Amount? Must also meet the ‘Apportioned shared commitment rule’
PI Loan	Fixed or Variable	Remaining Total Loan Term	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes
IO Loan	Remaining Total Loan Term is greater than Remaining IO Term Fixed or Variable	Remaining Total Loan Term minus Remaining IO Term	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes
IO Loan	Remaining Total Loan Term = Remaining IO Term Fixed or Variable	Remaining Total Loan Term	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes
Secured Line of Credit Loan	If no contracted term	240 months	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)		PI	Yes
Secured Line of Credit Loan	With a contracted term	Remaining Total Term	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	PI	Yes
Reverse Mortgage Loan	ICAP	NA	NA	NA	$0	NA
Reverse Mortgage Loan	IO Non ICAP	NA	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)	Higher of balance or limit	IO	Yes
Secured Overdraft	Secured by a consumer mortgage loan security	NA	Higher of: Final Rate plus interest rate buffer Floor Rate (MCAR)		IO	Yes
Bridging Loan	ICAP or I/O (non -ICAP)	No lending or approval (including ‘In Principle Approval’) is available if the application involves an existing Bridging Loan that is not being cleared using loan funds (refinance) or customer funds prior to drawdown of the new loan (non-refinance). For a clearing Bridging loan (ICAP or I/O), refer to: Commitment being refinanced using Loan funds > Any liability is being cleared and closed using loan funds Excluded mortgaged liability > A mortgage liability is to be cleared and closed independently by the customer via the associated property sale, after Unconditional Approval but prior to or simultaneous with drawdown / settlement Amended current commitment > Any liability will be cleared and closed independently by the customer, prior to Unconditional Approval
Legend ¹ RAMS mortgages are treated as external

2.11 Parental leave – use of ‘return to work’ income

Definition	When a borrower or income guarantor is currently on, or about to commence parental leave, we can use their ‘return to work’ income for serviceability, provided the requirements are met.
Exclusions	Any other extended leave like Grandparental Leave or Career Breaks are ineligible as this isn’t covered under Government Legislation like Parental Leave where a person is guaranteed for their job to be held open for 12 months.

Condition	Requirement
In all cases where ‘return income’ is to be used for serviceability	An employer’s letter is held which: Meets Document Standards of ‘Employer’s letter - general use’, and Displays: The return to work date. Conditions under which the employee will return, i.e. Full time or Part time Return to work income as per the 'Document Standards’ of ‘Employer’s letter-general use’ Only ‘Base income’ can be used in the serviceability assessment Include all children as dependants in OBP. (Including where the expected child(ren) has / have not yet been born, noting this is a variance to the "Definition of Dependant" rules in the Living Expense policy). Any supporting documents provided are required to be retained in the loan application.
Where the loan will be advanced and the first repayment is due after the return to work date	For Mortgage insured and Non-mortgage insured loans Use ‘Return to Work’ income i.e. reflecting the gross ‘base’ income amount which will be received once returning to work.
Where the loan will be advanced and the first repayment is due before the return to work date	For Mortgage insured loans: Requests for new or increased loans for purposes of “Investment” are not acceptable. Must be referred to Credit and will be considered on a case-by-case basis, to a maximum LVR of 90% inclusive of any capped premium. All other requirements as per below For both Mortgage insured and Non-mortgage insured loans: The following is required to calculate any servicing shortfall prior to the return to work: The expected settlement date (mandatory); and Any income that is currently, or will be received during the parental leave period must be verified to policy, refer Verifying Income ; and The number of weeks that the income will be received during the parental leave period; and The ‘Return to Work’ gross ‘base’ income amount that will be received once returning to work and the return-to-work date. Where a servicing shortfall amount is evident, the Broker must: Confirm how the shortfall will be covered whilst during the parental leave period; and Verify that sufficient funds are held to cover the shortfall via supporting documents (e.g. bank statement / transaction listing from external provider¹, internal extract or enquiry). The shortfall must be covered in addition to any funds required to fund the application. The supporting documents provided must meet Document Standards; and Enter comments into ApplyOnline detailing the explanation and the evidence used to confirm how the shortfall will be met, prior to return to work.
Legend ¹ SGB, BoM, BSA and RAMS are considered to be external providers Note: If the applicant is seeking to manage existing home loans, Mortgage Repayment Pause Option or switching to Interest Only repayments may better suit the customer’s situation.

2.12 Rental income tax deductions for Australian investment properties (Negative Gearing)

Definition	Generally negative gearing occurs when a rental property’s expenses (including interest) are greater than income earned from the rental property. The Australian tax system allows individuals with rental properties that are negatively geared, to deduct the loss against other income (e.g. PAYG income).
Serviceability	The use of negative gearing in serviceability is not mandatory
Eligibility	Negative gearing can be included in the serviceability assessment under the following conditions:
	Feature		Condition
	Application type		Available for both non-mortgage insured and mortgage insured loans
	Employment type		Available for both PAYG and Self Employed applicants
	Income		The applicant’s income must be subject to Australian taxation law, i.e. applicant is ordinarily resident in Australia and Loan serviceability must not be assessed using the Self-Employed fast track process unless the rental income commenced after the financial years covered by the ATO NOA. Refer to Self-employed Applicants > Rules you must apply > Fast track self-employed assessment.
	Applicable to the negatively geared loan:	Interest Rate	The actual current interest rate must be used in the negative gearing calculation
		Borrower	The deduction can only be applied to an applicant who is a borrower on the loan which is being negatively geared
		Loan purpose	The loan must be / have been taken out for the purpose of investing in residential real estate For both an existing mortgage or the new loan, negative gearing benefits can be included when all or part of a loan is for the purpose of investing in the specific rental property negative gearing is being applied to
		Deductible loan amount	Only the loan portion used for investing in the specific rental property negative gearing is being applied to can be used. The customer must declare the amount of the loan that is eligible or that is already being negatively geared The amount of negative gearing used May include: the purchase price of the property any associated costs in obtaining the investment property (e.g., stamp duty and legal costs). Must be the lower of the customer declared deductable loan amount or the actual loan balance
		Verification	As per Commitments policy
	Residential property that the negative gearing applies to		The percentage of tax deduction for Bank serviceability purposes that an applicant may claim is based on their share of property ownership. The property securing the loan must not be vacant land The property must have rental income verified in line with policy and used in the serviceability assessment The property must be owned by an individual (not a partnership, company or trust including an individual as trustee for (ATF)) When the property is rented on a short term basis, a rental income tax deduction / negative gearing can only be applied in serviceability when the property is already owned and the rental schedule confirms the property was rented / available for rent, for the full 52 weeks of the financial year. Also see Verifying Income policy > Supplementary Income > Rental income (in AUD) Rent received on a short term basis.
	Rental arrangement		The rental income cannot be from a National Disability Insurance Scheme (NDIS), Specialist Disability Accommodation (SDA) property

2.13 Serviceability Assessment: Changes to financial circumstance

As part of our responsible lending obligations, it is required to ask the customer about potential changes to their financial position over the next three years that would adversely affect their ability to meet their financial obligations under the loan.

Where such a change is expected, the customer is required to disclose:

The nature of the change (see below)
Their plans for continuing to meet the loan repayments (see below)

Nature of the change
The nature of change must be captured using the following declaration:

Declaration question to customer

Nature of Change

Is extended unpaid leave (e.g. maternity) the nature of the expected change?
Is end of contract/loss of employment the nature of the expected change?
Is reduced income the nature of the expected change?
Is retirement the nature of the expected change?
Is leaving employment the nature of the expected change?
Is medical treatment/illness the nature of the expected change?
Is increase in debt repayments the nature of the expected change?
Is large expenditure the nature of the expected change?
Is the nature of the expected change none of the above, reflected here as Other?

Plans to meet loan repayments

Will you continue to make repayments using savings?
Does the information captured in the application already reflect the anticipated change?
Will you continue to make repayments by securing additional income?
Will you continue to make repayments by reducing expenditure?
Will you continue to make repayments by the sale of other assets?
Will you continue to make repayments by the sale of your principal residence?
Will you continue to make repayments by other means?

Approval

Applications require approval from a Credit (or other authorised CAL holder) where:
- The customer advises that such a change is expected, and
- The application does not already reflect the change to the customer's financial situation (i.e. the application has not been assessed on the basis of the change)

All submissions to Credit for approval must include justification for the override request.

2.14 Debt To Income (DTI) Ratio

Loan assessment measure ‘Debt To Income Ratio’ assists Westpac Group to apply responsible lending practices in assessing a customer’s ability to service existing and proposed debts.

2.14.1 DTI Ratio Calculation

Measure	Definition
Debt	Total of the higher of limit / balance of all borrower and Income Reliant Guarantor's new and existing liabilities excluding: Hire purchase, Leasing, Other Liabilities Any liabilities being cleared and closed in the submission, whether by customer or loan funds Bridging Loans (applies to new or existing, internal or external, IO or ICAP repayments) Where a debt is being: educed in the submission, whether by customer or loan funds, the New limit is used in lieu of the Current Limit for DTI calculation apportioned, the entire commitment value (higher of balance/limit) is used in the DTI calculation (not the apportioned value) e.g. Debt = $500,000
Income	Total gross unshaded annual income from borrower/s and income guarantor (WBC only) (including gross rental income and all other income types) e.g. Income= $65,000
DTI Ratio Calculation	Debt ÷ Income e.g. $500,000 (Debt) ÷ $65,000 (Income)= 7.69 DTI ratio

2.14.2 High DTI Ratio - Commentary and Referral to Credit

OBP will return a DTI ratio Credit referral rule where:

the DTI ratio is equal to or greater than seven (7) and less than ten (10) and:
- the LVR is greater than 80%, and/or
- LMI applies
the DTI ratio is equal to or greater than ten (10).

In all instances where the DTI ratio is equal to or greater than seven (7), brokers/assessors must provide appropriate notes and comments in their submission to the effect that:

They have discussed the level of debt to income with the borrower(s) noting the debt level appears relatively high
They have identified any specific circumstances that are contributing to the high DTI result, such as other income not able to be included in the DTI calculation
Where any other policy rules have been triggered in addition to DTI, that valid mitigants can be demonstrated
They have validated the customers’ ability to meet repayments on the proposed loan noting the high DTI ratio
They have documented any other relevant rationale to support why the deal should still be approved

Where the application triggers a Credit referral, Credit will review the application with consideration applied to:

the notes and comments in the submission
the LVR, level of monthly surplus, credit history (including anything adverse on their credit bureau) and level of income
any other policy exceptions or rules triggered

2.15 Judgemental assessment

Some customers may exhibit circumstances where their financial situation needs to be considered as an exception by Credit ( or other authorised CAL holder ).

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

10 November 2021

Links updated

10 November 2021

Buffer Rate updated as per policy change 29 October 2021. APRA direction to increase the interest rate buffer from 2.5% to 3.0%

21 November 2021

STSL repayment income threshold table updated to reflect the ATO income thresholds and rates for 2021 -– 2022
Added 4 new BNPL providers, PayPal Payin4, Klarna, PayItLater, StepPay
Updated the Customer declared Living Expenses not compared to HEM with the following

Where the serviceability assessment includes self-employed income, Refer to Self-employed Applicants > Rental income – Fully verified self-employed assessment and Rental income – Fast track self-employed assessment

Updated the scenarios In the “Rental income tax deductions for Australian investment properties (Negative Gearing) section.
HEM Updates for Quarter 2, 2021

20 February 2022

Change 1
HEM Updates for Quarter 3, 2021
Change 2
Section - 2.12 Rental income tax deductions for Australian investment properties (negative gearing)
Editing correction from ‘Generically, negative gearing occurs when…’ to ‘Generally, negative gearing occurs when….’
Change 3
Commitments > Serviceability repayment amount > commitment type > Personal loan has been updated to reflect that servicing will now be assessed on the higher of customer declared contracted repayment amount or Derived repayment.
Old – serviceability repayment amount monthly figure
Customer Declared Contracted Repayment Amount
New – serviceability repayment amount monthly figure
Higher of:

The customer declared contracted repayment amount, or
Derived repayment (based on the higher of the limit or balance, remaining P&I term* and benchmark interest rate)

*Where the term field is left blank, the remaining term will default to 12 months.
Note: In all cases, where there is a Balloon payment applicable, it will not be included in the derived repayment calculation, on the basis that balloon amount will be covered by the return of the asset at the end of the loan agreement

3 April 2022

Updated section 2.5.1’Default changed commitment’ rule (deleted text highlighted in bold below). Change made to align with policy change approved on 22 Nov 2020 (as per historical governance section), when apportioned shared commitment became available for LMI (subject to credit approval at that time):

Where serviceability fails due to the ‘Default shared commitment rule’, the ‘Apportioned shared commitment rule’ may be considered if the loan does not require Lenders Mortgage Insurance

Updated section ‘2.5.2 Apportioned shared commitment rule”:
- Removed ‘Be aware that when the loan requires mortgage insurance, if the ‘Apportioned shared commitment rule’ has been utilised Credit review is mandatory.’ Credit review is no longer required.

22 May 2022

Change 1
Updated section ‘Serviceability Repayment Amount’ relating to Personal Loans:

Moved details of the ‘derived’ repayment amount calculation from ‘Serviceability Repayment Amount Monthly Figure’ column to the ‘Benchmark Repayment Amount’ column, and included the interest rate of 10.97% pa for visibility- this is a clarification only change, reflecting the existing calculation
Updated ‘Serviceability Repayment Amount Monthly Figure’ column to specify that the figure used is the higher of ‘Customer Declared Contracted Repayment Amount’ or ‘Benchmark Repayment Amount’. This is a clarification only change, reflecting existing rules and made to support the change detailed above

Change 2
HEM Updates for Quarter 4, 2021

Change 3
New sub chapter heading added 2.8.6 Customer declared living expenses are < 70% of HEM. As a result of the new sub chapter heading, other sections may have been renumbered.
Content moved under existing heading 2.8.5 Customer declared living expenses compared to HEM
Wording update for 2.8.6 Customer declared living expenses are < 70% of HEM

17 July 2022

Change 1

Updated section ‘Rules > Serviceability Repayment Amount’:
- Split the existing 'Buy Now, Pay Later commitments' from providers other than Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay’ into two sub-categories with unique rules:
  - ‘Buy Now Pay Later-Fixed Term’ –serviceability assessed using the ‘Customer Declared Contracted Repayment Amount’
  - ‘Buy Now Pay Later-Revolving Term’- serviceability assessed using a ‘Benchmark Repayment Amount’ of 3.8% of the higher of limit/balance

Note: both of the above previously had:

- - - a ‘Benchmark Repayment Amount’ calculation applied of ‘Outstanding balance% remaining term plus fees’
    - serviceability assessed using the higher of the ‘Benchmark Repayment Amount’ or the ‘Customer Declared Contracted Repayment Amount’
Updated section ‘Rules > Amended current commitment’:
- Updated the existing scenario 'Buy Now Pay Later' commitment / order, where its contracted clearance date is after Unconditional Approval but prior to drawdown / settlement’ :
  - Changed scenario name to 'Buy Now Pay Later-Fixed Term' commitment / order, where its contracted clearance date is after Unconditional Approval but prior to drawdown / settlement
Added a note ‘This option is not available for ‘Buy Now Pay Later-Revolving Term’

Change 2

Updated section Parental Leave – use of ‘return to work’ income”
- Moved policy specific rules from notes section of the table to the requirements section
- To reflect the new process requirements to enable OBP to calculate any servicing shortfall during the parental leave period
- Clarified the requirements for verifying the source of any shortfall during the parental leave period
Updated section ‘Credit’ to refer to Parental Leave – use of ‘return to work’ income where the applicant is seeking to use return to work income and/or will be on a reduced income due to pending parental leave
Updated section Frequently asked questions to remove duplicated FAQ

26 July 2022

Change 1

Updated Section 2.9 Bridging / Relocation and Reverse Mortgage Loans

Changed heading to ‘Reverse Mortgage Loans’
Removed information relating to Credit referral requirements for ongoing existing ‘Bridging / Relocation’ loans. Credit referral is no longer required, as no lending or approval (including ‘In Principle Approval’) is permitted for ongoing existing ‘Bridging / Relocation’ loans

Change 2

Updated section 2.9.1 Bridging / Relocation and Reverse Mortgage Loan – supporting documentation and information:

Changed heading to ‘Reverse Mortgage Loan – supporting documentation and information’
Removed information relating to ongoing existing ‘Bridging / Relocation’ loans . Supporting documents are no longer required, as no lending or approval (including ‘In Principle Approval’) is permitted for ongoing existing ‘Bridging / Relocation’ loans
Deleted section ‘Existing Bridging / Relocation loan: Asset Value’. Asset value assessment is no longer required, as no lending or approval (including ‘In Principle Approval’) is permitted for ongoing existing ‘Bridging / Relocation’ loans

Change 3
Section 2.10.2 Benchmark Repayment Amount

Updated table ‘Benchmark repayment amount - New and existing internal mortgage’:
- Separated scenarios into Bridging Loan - New (ICAP) and Bridging / Relocation Loans - Existing (ICAP and IO (non- ICAP) ).
- Policy rules for Bridging Loan – New (ICAP) are unchanged
- Removed Bridging Loans – new (IO) as they cannot presently be originated by OBP, i.e. only ICAP product is available
- Added a new rule for Bridging / Relocation Loans – existing (ICAP and IO (non ICAP), to specify that no lending or approval (including ‘In Principle Approval’) is available if the application involves an existing Bridging Loan that is not being cleared using loan funds (refinance) or customer funds prior to drawdown of the new loan (non-refinance). Included links to the policy rules relating to clearing loans
Updated table ‘Benchmark repayment amount - External existing mortgage’:
- Separated scenarios into ‘Reverse Mortgage IO Loan, ‘Reverse Mortgage ICAP Loan’ and ‘Bridging Loan (ICAP or IO (non-ICAP)’
- Policy rules for ‘Reverse Mortgage IO Loan, ‘Reverse Mortgage ICAP Loan’ are unchanged
- Added a new rule for ‘Bridging Loan (ICAP or IO (non- ICAP)’, to specify that no lending or approval (including ‘In Principle Approval’) is available if the application involves an existing Bridging Loan that is not being cleared using loan funds (refinance) or customer funds prior to drawdown of the new loan (non-refinance). Included links to the policy rules relating to clearing loans

21 August 2022

Change 1

Updated section Study and Training Support Loan (STSL) Repayment Income Thresholds with 2022-2023 income thresholds

Change 2

Updated HEM table update - attached HEM table for Q1 2022

Change 3

Updated references to the ‘Minimum Document Standards Matrix’. The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter. Existing references have been updated to point to the ‘Document Standards’ chapter
Updated references to match sub-section name changes made within the ‘Document Standards’ chapter

Change 4
Update section DTI referral to Credit to remove reference to Bridging Loans, i.e:
From

They have identified any specific circumstances that are contributing to the high DTI result, such as a bridging loan or other income not able to be included in the DTI calculation
Any specific drivers of high DTI such as bridging loans or other income not able to be included in the DTI calculation

They have identified any specific circumstances that are contributing to the high DTI result, such as other income not able to be included in the DTI calculation
Any specific drivers of high DTI such as other income not able to be included in the DTI calculation

2 October 2022

Change 1

Updated section ‘DTI Calculation’ to remove ‘Study and Training Support Loans (STSL)’ as an excluded liability type for DTI (‘STSL’ now included in DTI)

Change 2

Updated section ‘Serviceability Repayment Amount’ to include a link to ‘ Commitments > Process to Follow’ for the commitment types:
- Margin Loans
- Cards

Change 3
Update to content in 2.2 Debt service coverage ratio
Old

DSC Table
Feature	Minimum DSC
Feature	No LMI	With LMI
LVR ≤ 80%	1.00	1.00
LVR > 80%	1.00 if LMI exemption applies under Special Packages (Medico, Proloan, Staff loans), otherwise: Not applicable	1.00
Foreign income	1.15	NA
Serviced apartment, hotels and student accommodation	1.25	NA
Building loan - Owner Builder	1.00	NA

New

DSC Table
Feature	Minimum DSC
Feature	No LMI	With LMI
LVR ≤ 80%	1.00	1.00
LVR > 80%	1.00 if LMI exemption applies under Special Packages ( Medico , Proloan , Staff loans ), otherwise: Not applicable	1.00
Foreign income	1.15	NA
Student accommodation	1.25	NA
Building loan - Owner Builder	1.00	NA

Change 4
Policy clarification – impacted section 2.12 Rental income tax deductions for Australian investment properties (negative gearing) > Serviceability > Scenario table
Old

Investment property owned by an entity

Entity is the borrower

Not eligible to use rental income tax deduction / negative gearing for serviceability assessment
Refer to Self-employed applicants policy > rules you must apply > Rental income - Fully verified self-employed assessment.

New

Investment property purchased by an entity

Entity is the borrower

Not eligible to use rental income tax deduction / negative gearing for serviceability assessment

Refer to Self-employed applicants policy > rules you must apply > Rental income - Fully verified self-employed assessment .

Change 5
Policy clarification – impacted section 2.12 Rental income tax deductions for Australian investment properties (negative gearing) > Eligibility table > Feature
Old

Rental arrangement

The investment property must not be rented on an intermittent basis. This includes but is not limited to:
- Holiday homes
- Snow lease
- Serviced apartments
The rental income cannot be from a National Disability Insurance Scheme (NDIS), Specialist Disability Accommodation (SDA) property

New

Rental arrangement

The rental income cannot be from a National Disability Insurance Scheme (NDIS), Specialist Disability Accommodation (SDA) property

Change 6
Updated section ‘ Why this policy?’:

Included words and link highlighted in bold

a servicing (variation) activity requiring a serviceability assessment

20 November 2022

Change 1
Updated HEM table – attached HEM table for Q2 2022
Update to wording in section 2.8.3 Month Household Expenditure Measure – Table
Old wording
For household incomes greater than $574k gross per annum the origination system will extrapolate the HEM value using the following calculation:
New wording
For household incomes greater than $584k gross per annum the origination system will extrapolate the HEM value using the following calculation

Change 2
Updated section 2.5.3 Serviceability Repayment Amount for Hire purchase commitment type:
Old wording
Customer Declared Contracted Repayment Amount
New wording
Contracted Repayment Amount

Change 3
New content added to section 2.12 rental income tax deductions for Australian investment properties (Negative Gearing) > Eligibility table > Feature > Property Type
Old wording
The property securing the loan must not be vacant land

The property must have rental income entered and verified in line with policy
New wording

The property securing the loan must not be vacant land
The property must have rental income entered and verified in line with policy
When the property is rented on a short term basis, a rental income tax deduction / negative gearing can only be applied in serviceability when the property is already owned and the rental schedule confirms the property was rented / available for rent, for the full 52 weeks of the financial year. Also see Verifying Income policy > Supplementary Income > Rental income (in AUD) Rent received on a short term basis.

19 February 2023

Change 1
Updated section 2.5.3 Serviceability Repayment Amount’ table to include new commitment type of Centrelink Debt

Centrelink debt

N/A

Assessed at 100% of the monthly commitment, per repayment arrangement

Refer to Commitments > Rules you must apply

Change 2
Update to section 2.5.3 Serviceability repayment amount for commitment types ‘Buy Now, Pay later commitments’ from providers other than: Afterpay, Laybuy, Sezzle, Deferit, PayPal Payin4, Klarna, PayItLater, StepPay
Formatting changed, rules have remained the same
Old format

'Buy Now, Pay Later commitments' from providers other than: Afterpay Laybuy Sezzle Deferit PayPal Payin4 Klarna PayItLater StepPay	Refer to applicable ‘Buy Now Pay Later’ account type below: ‘Buy Now Pay Later - Fixed Term’ ‘Buy Now Pay Later - Revolving Term’
‘Buy Now Pay Later - Fixed Term' Refer to Glossary	N/A	Customer Declared Contracted Repayment Amount	No
‘Buy Now Pay Later - Revolving Term' Refer to Glossary	3.8% of higher of limit / balance	Benchmark Repayment Amount	No

New format

'Buy Now, Pay Later commitments' from providers other than: Afterpay Laybuy Sezzle Deferit PayPal Payin4 Klarna PayItLater StepPay	‘Buy Now Pay Later - Fixed Term' Refer to Glossary for definition	N/A	Customer Declared Contracted Repayment Amount	No
	‘Buy Now Pay Later - Revolving Term' Refer to Glossary for definition	3.8% of higher of limit / balance	Benchmark Repayment Amount	No

Change 3
Update to section 2.5.3 Serviceability repayment amount for commitment types > Rental / board expense
Old wording

Rental / board expense

Refer to Rent / board expense

New wording

Rental expense
or
Board expense

Refer to Glossary for definition of a:

Boarder
Renter

Note: In OBP outgoing rent / board is categorised as an expense (non-discretionary)

N/A

The higher of either:

100% of the actual monthly expense (it is acceptable for the declared amount to be > = $0 )
Notional Rent expense

*Note: Exclusion of notional rent is only available under limited circumstances, refer Notional rent expense

Borrower's residential housing status is defined as 'Rent', 'Board' or 'Live with parents' and they will not be residing in the security collateral after purchase or final drawdown

When multiple tenants are on a lease, it is acceptable for the borrower’s share of the actual monthly expense to be loaded as percentage of the total contracted rent. Excludes where rent / board expense is shared with a spousal partner (then the borrower and their spouse’s combined ownership of the expense must be entered)

Verifying rent / board expense:
In OBP outgoing rent / board is categorised as an expense (non-discretionary) and is required to be verified. For information about how to verify outgoing declared rent and / or outgoing declared board refer to Commitments policy

Change 4
Section 2.6 Rent / Board expense has been deleted and content moved to 2.5.3 Serviceability Repayment amount.
Deleted content

Expense included when:	Serviceability is assessed at:	Other policy rules
The borrower's residential housing status is defined as 'Rent', 'Board' or 'Live with parents' and they will not be residing in the security collateral after purchase or final drawdown Refer Commitments > Renter and boarder definition, system entry and verification	The higher of either: 100% of actual monthly commitment (it is acceptable for a declared amount to be $0 or greater), or Notional Rent expense amount	Where multiple tenants are on a lease, it is acceptable for the actual monthly commitment to be a portion of the total contracted rent For information about how to verify outgoing declared rent and/or outgoing declared board refer to Commitments policy

Change 5
Name change for section 2.6 Notional rent expense amount.
New section name 2.6 Notional rent expense
Update to content in this section
Old wording
Where a borrower or (any) income guarantor (Spousal-Income Guarantee or Spousal-Income + Security Guarantee ) has the residential status of Rent / Board or Living with Parents and they will not be residing in the security property after purchase or drawdown, a minimum rental outgo will be applied to the serviceability assessment.

Refer to table below for the notional rent rule applicable to your application.

Borrower Type	Residential status	Notional Rent Rule
All borrower types	Living with spousal partner Borrower lives in their spousal partner's home, but is not an owner of that property. The borrower has declared $0 outgoing rent / board amount.	Notional rent WILL NOT apply
All borrower types	Will reside in the security property upon completion of construction	Notional rent WILL NOT apply
Individual	Rental arrangement Borrower lives in a rental property and rental amount is verified through one of the acceptable documents	Notional Rent WILL apply to the individual where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with spouse	Rental arrangement Borrowers living in the same rental property and rental amount is verified through one of the acceptable documents	Notional Rent WILL apply at household level where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with spouse	Rental arrangement Borrowers who are not living in the same rental property and rental amount is verified through one of the acceptable documents	Notional Rent WILL apply to each applicant where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with non-spouse	Rental arrangement Borrowers living in a rental property (may be the same or different address) and rental amount is verified through one of the acceptable documents.	Notional Rent WILL apply to each applicant where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Individual	Living with Parents or other boarding arrangement Borrower lives with parents or other boarding arrangement and has declared $0 or greater than $0 outgoing rent / board	Notional Rent WILL apply to the individual where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with spouse	Living with Parents or other boarding arrangement Both borrowers living with the same with parent(s) or with the same boarding arrangement and has declared $0 or greater than $0 outgoing rent / board	Notional Rent WILL apply at household level where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with spouse	Living with Parents or other boarding arrangement Each borrower living at a different address, with parents or other boarding arrangement and has declared $0 or greater than $0 outgoing rent / board	Notional Rent WILL apply to each applicant where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with non-spouse	Living with Parents or other boarding arrangement Borrower lives with parents or other boarding arrangement and has declared $0 or greater than $0 outgoing rent / board.	Notional Rent WILL apply to each applicant where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Individual	Living with spousal partner Borrower lives in their spousal partner's home, but is not an owner of that property and the spouse is not a borrower or guarantor on the loan. The borrower has declared greater than $0 outgoing rent / board amount.	Notional Rent WILL apply to each applicant where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.
Joint with spouse	Living with spousal partner Borrower lives in their spousal partner's home, but is not an owner of that property and the spouse is a co-borrower on the loan. The borrower has declared greater than $0 outgoing rent / board amount.	Notional Rent WILL apply to the individual where the declared amount is below $650.00 per month Notional Rent CANNOT be excluded from serviceability assessment.

New wording
Where a borrower or (any) income guarantor (WBC only) (Spousal-Income Guarantee or Spousal-Income + Security Guarantee ) is Renting, Boarding or Living with Parents at the time of application, and they:

Will be residing in the security property after purchase or drawdown, notional rent will not apply. This includes where a property is under construction, and it will be occupied by the borrower(s) upon completion.
Will not be residing in the security property after purchase or drawdown, a minimum notional rental outgo will be applied to the serviceability assessment. Refer to ‘Borrower Type’ in table below.

For how to verify outgoing rent or board refer to Commitments policy > Customer commitments:

Outgoing board
Outgoing rent

Refer to Glossary for definition of a:

Boarder
Renter

Borrower Type	Residential status	Declared outgo	Notional Rent Rule
Individual	Living with parents or other boarding arrangement²	Borrower has declared >= $0 outgoing rent / board amount.	Notional rent WILL apply to the individual and CANNOT be excluded from serviceability assessment.
	Rental arrangement²
	Living with spousal partner¹ Borrower lives in their spousal partner's home and Borrower is not an owner of that property and Spouse is / is not a co-borrower or income guarantor (WBC only) on the loan	Borrower has declared $0 outgoing rent / board amount	Notional rent WILL NOT apply Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied at an applicant level
		Borrower has declared > $0 outgoing rent / board	Notional Rent WILL apply to the individual and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 per month applied to the applicant
Joint with spouse¹	Living with parents or other boarding arrangement² Both borrowers living with the same parent(s) or in the same boarding arrangement	Borrowers have declared > = $0 outgoing rent / board	Notional Rent WILL apply at household level and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 per month applied at household level
	Rental arrangement² Both borrowers living in the same rental property
	Living with parents or other boarding arrangement² Each borrower living at a different address, either with parents or other boarding arrangement	Borrowers have declared > = $0 outgoing rent / board	Notional Rent WILL apply to each applicant and CANNOT be excluded from serviceability assessment Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied at an applicant level
	Rental arrangement² Borrowers are not living in the same rental property
Joint with non-spouse	Living with Parents or other boarding arrangement² Borrower lives with parents or other boarding arrangement	Borrowers have declared >= $0 outgoing rent / board	Notional Rent WILL apply to each applicant and CANNOT be excluded from serviceability assessment Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied at an applicant level
	Rental arrangement² Borrowers living in a rental property (may be the same or different address)
	Living with spousal partner² Borrower(s) live in their spousal partner's home and Borrower(s) is not an owner of that property and Spouse is / is not a co-borrower or income guarantor (WBC only) on the loan	Borrower(s) has declared $0 outgoing rent / board	Notional rent WILL NOT apply
		Borrower has declared > $0 outgoing rent / board	Notional Rent WILL apply to the individual and CANNOT be excluded from serviceability assessment. Serviceability will be assessed on the higher of: Actual / declared monthly amount Or Notional Rent $650.00 pm applied to the individual
Legend	¹ Spouse = married or de facto ² Borrower does not reside in a property which they already own, and they will not be residing in the security property after purchase or drawdown.

Change 6
Updated section ‘Rental income tax deductions for Australian investment properties (Negative Gearing) > Eligibility’
Old wording
For a new purchase the proposed deductible loan amount may include the purchase price of the property and any associated costs in obtaining the investment property such as stamp duty, legal costs and lenders mortgage insurance
New wording
For a new purchase, the proposed deductible loan amount:

may include:
- the purchase price of the property
- any associated costs in obtaining the investment property such as stamp duty, legal costs and capitalised lenders mortgage insurance premium
cannot exceed the actual loan amount

Change 7
Update to content in section 2.5 Commitments
Old wording

Borrower and income guarantor (WBC only) (Spousal-Income Guarantee or Spousal-Income plus Security Guarantee) commitments are considered in serviceability. Refer to Guarantees
All existing debts are to be reflected in the application, regardless of whether they are to be closed, reduced or continued after the loan activity being assessed.

Also refer to Commitments policy.
New wording
The Borrowers and any income guarantor (WBC only) (Spousal-Income Guarantee or Spousal-Income plus Security Guarantee – refer to Guarantees policy) commitments are considered in serviceability.
All existing debts are to be reflected in the application, regardless of whether they are to be closed, reduced or continued after the loan activity being assessed.
Also refer to Commitments policy.

Change 8
Update to wording in section 2.5.1 Default shared commitment rule
Old wording

Where an existing facility is shared with another borrower ( i.e. >1 borrower on a loan ):
- The ‘Default shared commitment rule’ requires:
  - 100% of that facility amount and 100% of its associated ‘Serviceability Repayment Amount’ to be included in the application (aggregate) level serviceability assessment
    - e.g. if a new loan / loan increase is in a sole name, but an existing facility is held in joint / multiple names, the full amount of the existing facility and its associated ‘Serviceability Repayment Amount’ must be applied against the sole borrower.
- Where serviceability fails due to the ‘Default shared commitment rule’, the ‘Apportioned shared commitment rule’ may be considered.

New wording
Where an existing commitment is shared with another borrower ( i.e. >1 borrower on a loan) the ‘Default shared commitment rule’ requires 100% of that facility amount and 100% of its associated ‘Serviceability Repayment Amount’ to be included in the application (aggregate) level serviceability assessment

e.g. if a new loan / loan increase is in a sole name, but an existing facility is held in joint / multiple names, the full amount of the existing facility and its associated ‘Serviceability Repayment Amount’ must be applied against the sole borrower.

Change 9
Update to wording in section 2.5.2 Apportioned shared commitment rule
Old wording
The ‘Apportioned shared commitment rule’ is an option that can be applied when an existing commitment is shared between a borrower (or income guarantor WBC only), of the new loan application, and a person that is not a borrower on the new loan. Typically, the Apportioned shared commitment rule would be considered when serviceability fails based on the ‘Default shared commitment rule’.

Apportioned shared commitment rule is not available:

when the new loan or shared commitment has a company co-borrower
when foreign income is used in the serviceability assessment
when any co-borrower / income guarantor (WBC only) of the shared commitment resides outside of Australia
between spouse only (both spouse residing at the same address and spouse residing at a different address)

Where a borrower/s or income guarantor/s (WBC only) share an existing facility with another borrower who is:

not the spouse of the borrower and not a co-borrower on the new loan or loan variation being assessed, and
not an income guarantor (WBC only) on the new loan or loan variation being assessed, then
- an apportioned ‘Serviceability Repayment Amount’ may be considered in the new loan application serviceability assessment, in lieu of the 100% used under the ‘Default shared commitment rule’. Refer to ‘Serviceability Repayment Amount’ to determine which commitment types are eligible

The apportioned Serviceability Repayment Amount’ reflects a percentage, which is the highest of the below categories

New wording
The ‘Apportioned shared commitment rule’ is an option which can be used when serviceability fails based on the ‘Default shared commitment rule’.

To be eligible for the apportioned shared commitment rule, the borrower(s) or income guarantor(s) (WBC only) share an existing commitment with another borrower who is not:

The spouse of the borrower and not a co-borrower on the new loan or loan variation being assessed, or
An income guarantor (WBC only) on the new loan or loan variation being assessed

In addition to the above, the commitment type must allow an apportioned serviceability repayment amount. To identify if the commitment is eligible to be apportioned, refer to following sections in this chapter:

Serviceability Repayment Amount
Benchmark Repayment Amount – Mortgage
- Benchmark Repayment Amount calculation – New and existing internal¹ mortgage
- Benchmark Repayment Amount calculation – external¹ existing mortgage

The applicant’s apportioned share of the commitment used in serviceability assessment is based on the highest of the below categories.

(Note: the content contained in the Apportioned repayment categories table has not been changed)

Apportioned shared commitment rule is not available when:

The new loan or shared commitment has a company co-borrower
Foreign income is used in the serviceability assessment
Any co-borrower / income guarantor (WBC only) of the shared commitment resides outside of Australia
The existing commitment is shared between spouses only (both spouses residing at the same address and both spouses residing at different addresses). If the borrower and non-borrower spouse reside at different addresses, the borrower has to take on the full responsibility for both their own as well as the spouse’s portion of the debt.

Change 10

Re-named and updated rules in the following sections:

- Renamed From 2.17.1 DTI calculation to 2.17.1 DTI Ratio Calculation
- Renamed From 2.17.2 DTI Referral to Credit to as 2.17.2 High DTI Ratio - Commentary and Referral to Credit

Old wording

2.17.1 DTI calculation

OBP will calculate a ‘Debt To Income' (DTI) ratio and automatically refer applications to Credit where the DTI is greater than or equal to seven (7) times.

Measure	Definition
Debt	Total of the higher of limit / balance* of all borrower and Income Reliant Guarantor's new and existing liabilities excluding: Hire purchase, Leasing, Other ~~/ Contingent~~ Liabilities Any liabilities being cleared and closed in the submission, whether by customer or loan funds Bridging Loans (applies to new or existing, internal or external, IO or ICAP repayments) Where a debt is being reduced in the submission, whether by customer or loan funds, the New limit is used in lieu of the Current Limit for DTI calculation e.g. Debt = $500,000
Income	Total gross unshaded annual income from borrower/s and income guarantor (WBC only) (Spousal - Income Guarantee or Spousal-Income plus Security Guarantee) (including gross rental income and all other income types) e.g. Income = $65,000
DTI Ratio Calculation	Debt ÷ Income e.g. $500,000 (Debt) ÷ $65,000 (Income) = 7.69 DTI ratio

2.17.2 DTI Referral to Credit

When the DTI ratio referral rule is displayed, Lenders should provide appropriate notes and comments in their submission to Credit to the effect that:

They have discussed the level of debt to income with the applicant(s) noting the debt level appears relatively high
They have identified any specific circumstances that are contributing to the high DTI result, such as other income not able to be included in the DTI calculation
Where any other policy rules have been triggered in addition to DTI, that valid mitigants can be demonstrated
They have validated the customers’ ability to meet repayments on the proposed loan noting the high DTI ratio
They have documented any other relevant rationale to support why the deal should still be approved

Credit will take the following into consideration when considering applications referred for high DTI:

That the Lender has held detailed conversations with the customer regarding their DTI position, and ability to afford the proposed loan despite the high DTI, and documented this in Notes / Comments accordingly
Any other policy exceptions or rules triggered
The LVR, level of monthly surplus, credit history (including anything adverse on their credit bureau) and level of applicant income
Any specific drivers of high DTI such as other income not able to be included in the DTI calculation
Any other supporting comments provided by the lender as to the reason for the high DTI and / or rationale as to why the deal should still be approved despite the high DTI

New wording

2.17.1 DTI Ratio Calculation

Measure	Definition
Debt	Total of the higher of limit / balance* of all borrower and Income Reliant Guarantor's new and existing liabilities excluding: ‘Hire purchase’, ‘Leasing’, ‘Other’ Liabilities Any liabilities being cleared and closed in the submission, whether by customer or loan funds Bridging Loans (applies to new or existing, internal or external, IO or ICAP repayments) Where a debt is being reduced in the submission, whether by customer or loan funds, the New limit is used in lieu of the Current Limit for DTI calculation e.g. Debt = $500,000
Income	Total gross unshaded annual income from borrower/s and income guarantor (WBC only) (Spousal - Income Guarantee or Spousal-Income plus Security Guarantee) (including gross rental income and all other income types) e.g. Income = $65,000
DTI Ratio Calculation	Debt ÷ Income e.g. $500,000 (Debt) ÷ $65,000 (Income) = 7.69 DTI ratio

2.17.2 High DTI Ratio - Commentary and Referral to Credit

OBP will return a DTI ratio Credit referral rule where:

the DTI ratio is equal to or greater than seven (7) and less than ten (10) and:
- the LVR is greater than 80%, and/or
- LMI applies
the DTI ratio is equal to or greater than ten (10).

In all instances where the DTI ratio is equal to or greater than seven (7), brokers/assessors must provide appropriate notes and comments in their submission to the effect that:

They have discussed the level of debt to income with the applicant(s) noting the debt level appears relatively high
They have identified any specific circumstances that are contributing to the high DTI result, such as other income not able to be included in the DTI calculation
Where any other policy rules have been triggered in addition to DTI, that valid mitigants can be demonstrated
They have validated the customers’ ability to meet repayments on the proposed loan noting the high DTI ratio
They have documented any other relevant rationale to support why the deal should still be approved

Where the application triggers a Credit referral, Credit will review the application with consideration applied to:

the above comments
the LVR, level of monthly surplus, credit history (including anything adverse on their credit bureau) and level of applicant income
any other policy exceptions or rules triggered

Change 11
Updated HEM table update - attached HEM tables for Q3 2022

Change 12
Updated table in ‘Amended current commitment’ to include the following content where a document is provided from an external provider to evidence an account has been closed:
New wording
Where a document from a facility provider is used to confirm that the liability has been closed, there is no requirement for this document to meet the maximum age of documents requirement for that document, i.e. the document may exceed 2 months

24 April 2023

Change 1
New section added
2.4.1 Apportioned household expenses and shared commitments - Spousal same household

This policy option allows the borrower’s serviceability to be assessed using their share of household living expenses (both HEM comparable and non – HEM comparable expenses) and a share of the repayments for any joint commitments (i.e. debts / liabilities), when:

The borrower’s spouse is not an applicant (or an income reliant guarantor - WBC only) for the new loan application being assessed; and
The borrower and the borrower’s spouse live at the same address; and
The only borrowers on any existing shared commitments are the borrower and the borrower’s spouse

This option cannot be used where:

When the existing loan or proposed new loan has a company co-borrower
When borrowers on the existing shared commitment are not spouse only or do not fit the banks definition of a household
When either borrower of the existing or new loan earns foreign income

^#Where the borrower is not eligible for this policy, they may meet the requirements for the Apportioned shared commitments rule, refer to that section for further details.

Serviceability calculation
The portion of the expense or commitment repayment used in the serviceability assessment will be based on the borrower’s contribution to the total household income i.e. by calculating the borrower’s income as a percentage of total household income (i.e. borrower + spouse income), and applying that same percentage to shared household living expenses and commitments.

The borrower’s contribution to household income must be evidenced by verifying both the borrower and non-borrower’s (borrower’s spouse) income. The non-borrower (borrower's spouse) must be verified using the following income verification method:

PAYG must be verified using standard income verification policy. Refer to Verifying Income policy.
Self Employed non-borrower must be verified using Fast Track self-employed assessment. The full Fast Track policy including ‘Eligibility’ and ‘Exclusion’ criteria applies. Refer to Self Employed Applicants policy.

Notes:
When the Apportioned household expense and shared commitments - Spousal same household option is applied the HEM band calculation is not apportioned and remains determined based on total household income. The HEM value used in serviceability (determined based on total household income) will be apportioned under this policy option.

In OBP the following are categorised as expenses:

Outgoing rent / board
Outgoing child support (maintenance)
Outgoing Alimony (spousal support)

Verification requirements
When the Apportioned household expense and shared commitments - Spousal same household policy option is applied, the broker must sight the non-borrower spouse privacy and consent, identification, and income verification documents. The broker must upload these documents to the ApplyOnline file and confirm:

The borrower’s spouse resides at the same address as the borrower; and
The name of the borrower’s spouse matches the employee’s name on the income documents used to verify the borrower’s spouse income, including the ATO notice of assessment where the borrower’s spouse is self-employed.

Related Serviceability assessment policy:

Default shared commitment rule
Apportioned shared commitment rule
Serviceability repayment amount
Benchmark repayment amount – Mortgage
- Benchmark repayment amount calculation – New and existing internal mortgage
- Benchmark repayment amount calculation – External existing mortgage

Change 2
Update to wording in 2.5.2 Apportioned shared commitment rule
Old wording
Apportioned shared commitment rule is not available when:

The new loan or shared commitment has a company co-borrower
Foreign income is used in the serviceability assessment
Any co-borrower / income guarantor of the shared commitment resides outside of Australia
The existing commitment is shared between spouses only (both spouses residing at the same address and spouses residing at a different address). If the borrower and non-borrower spouse reside at different addresses, the borrower has to take on the full responsibility for both their own as well as the spouse’s portion of the debt.

New wording
Apportioned shared commitment rule is not available when:

The new loan or shared commitment has a company co-borrower
Foreign income is used in the serviceability assessment
Any co-borrower / income guarantor of the shared commitment resides outside of Australia
The existing commitment is shared between spouses only:
- If the borrower and non-borrower spouse reside at the same address, refer to Apportioned household expenses and shared commitments – Spousal same household policy
- If the borrower and non-borrower spouse reside at different addresses, the borrower has to take on the full responsibility for both their own as well as the spouse’s portion of the debt.

Change 3
Update to section 2.5.3 Serviceability repayment amount for commitment types > Rental / board expense
New scenario section added to the bottom of the Commitment type table

Scenarios – Outgoing rent or outgoing board

Where the borrower and their spouse (non-borrower on the new loan) rent a property together, then the total contracted rental amount and 100% ownership of the expense must be entered against the borrower. Where Apportioned household expense and shared commitments – Spousal same household policy is being utilised, you will need to include the entire rental outgoing amount as an expense. The system will automatically calculate the borrower’s percentage of the rental outgo to be used in the serviceability. Include notes in the application to describe the scenario clearly for the Assessor.
Where the borrower and their spouse (non-borrower on the new loan), rent a property with 1 other person, then the borrower’s and their spouse’s share of the total contracted rent must be entered, e.g. 3 tenants on the lease, then the borrower’s and their spouse’s share of the rent is 66%. This can be entered against the borrower as:
- 66% of the total contracted rental outgo amount and 100% expense ownership, or
- The total contracted rental outgo amount and 66% expense ownership

Where Apportioned household expense and shared commitments - Spousal same household policy has been applied, t he system will automatically calculate the borrower’s percentage of the rental outgo shared with their spouse, there is no requirement to manually calculate the borrower’s share of the rental expense.

The borrower and their spouse rent a property and are applying for a new loan in joint names. The total contracted rent may be loaded in full against either borrower, or split between both borrowers, providing the total contracted rental outgo is entered and the combined expense ownership reflects 100%. Apportioned household expense and shared commitments -Spousal same household policy does not apply in this instance as it is a joint borrower application.
The borrower rents a property with 2 other people (non-spousal), who are not co-borrowers on the new loan application. It is acceptable to enter the borrower’s share of the total contracted rent based on the number of tenants on the lease, e.g. 3 tenants on the lease, then the borrower’s share of the rent is 33%. This can be entered as:
- 33% of the total contracted rental outgo amount and 100% expense ownership, or
- The total contracted rental outgo amount and 33% expense ownership
The borrower and co-borrower (non-spousal) on the new loan application rent a property together and are both on the lease. An amount or expense ownership percentage equivalent to 50% of the total contracted rental outgo must be entered against each borrower, i.e. this can be entered as:
- 50% of the total contracted rental outgo amount and 100% expense ownership against each borrower, or
- The total contracted rental outgo amount and 50% expense ownership against each borrower

21 May 2023

Change 1
Policy re-write to:

re-format and re-wording of policy to improve readability

Change 2
New Content added:
2.8.8 Investment Property Expense Floor

An investment property expense floor will be used for serviceability for residential properties that earn long term rental income.
The investment property costs used for serviceability will be assessed on the higher of:

Customer declared investment property costs: OR
10% of Gross Rental Income

Investment Property Expense floor does not apply for:

Short term rental income
Defence Housing Authority (DHA) rental Guarantee
NRAS security under a Head Lease structure
Commercial properties

Change 3
Updated HEM table update - attached HEM tables for Q4 2022

Change 4
Updated section 2.10.1 Serviceability Assessment Rate (SAR) – Mortgage to include a reference and link to modified SAR under Streamlined Refinance as follows:
New wording added
Note: A modified SAR may be applied to applications to refinance an existing mortgage (internal or external), where the application meets all eligibility criteria and conditions under Streamlined Refinance.

2 July 2023

Change 1
Update to Section “Amended Current commitment. “ : Any liability will be cleared and closed independently by the customer¹, prior to Unconditional Approval –

to allow for cancellation or closed.
Update to wording

20 August 2023

Change 1
Changes to ‘Rental income tax deductions for Australian investment properties (Negative Gearing) >’:
1. Policy changes:

- ‘For the negatively geared loan: Loan Purpose’:
  - New Policy: For both an existing mortgage or the new loan, negative gearing benefits can be included when all or part of a loan is for the purpose of investing in the specific rental property negative gearing is being applied to
  - Old policy: The loan must not be used for other investment purposes (including shares)
- ‘For the negatively geared loan: ‘Deductible Loan Amount’:
  - New Policy:
    - Only the loan portion used for investing in the specific rental property negative gearing is being applied to can be used.
    - The customer must declare the amount of the loan that is eligible or that is already being negatively geared
    - The deductible amount:
      - may include:
        
        the purchase price of the property
        
        any associated costs in obtaining the investment property (e.g., stamp duty and legal costs).
      - for a new negatively geared loan must be the lower of:
        
        the customer declared deductable loan amount
        
        loan limit
      - for an existing negatively geared loan: must be the lower of:
        
        the customer declared deductable loan amount
        
        loan limit
        
        loan balance
  - Old policy:
    - Negative gearing benefits can only be included where the entire loan interest is eligible for the deduction.
    - For a new purchase, the proposed deductible loan amount:
      - may include:
        
        the purchase price of the property
        
        any associated costs in obtaining the investment property such as stamp duty, legal costs and capitalised lenders mortgage insurance premium
      - cannot exceed the actual loan amount
- ‘For the negatively geared loan: ‘Verification’:
  - New Policy: As per Commitments policy
  - Old Policy:
    - Where an existing loan balance has been entered in the negative gearing benefit section of OBP, it must be supported by the following:
      - Internal Loan¹ - The current balance can be confirmed by the printout generated by an internal system.
      - External Loan¹ - A copy of the most recent loan statement/s ( within 2 months of age in line with existing aged document policy ) is to be provided.

¹ For WBC: SGB, BoM, BSA and RAMS are considered to be external providers
¹ For SGB, BoM, BSA: WBC and RAMS are considered to be external providers

2. Clarification only changes (no associated policy change):

- added eligibility condition ‘Loan Parties for the negatively geared loan: The deduction can only be applied to an applicant who is a borrower on the loan which is being negatively geared’
- reworded eligibility condition ‘Residential Real estate that the negative gearing applies to’:
  - New wording: The property must be owned by an individual (not a partnership, company or trust including an individual as trustee for (ATF))
  - Old wording: The property must be owned by an individual (not a company, trust, entity)
- The property must be owned by an individual (not a partnership, company or trust including an individual as trustee for (ATF))
- removed reference to ‘OBP’
- general reformatting and rewording to improve clarity

Change 2

Update to Study and Training Support Loan (STSL) Repayment Income Thresholds to 2023-2024 values

Change 3
Updated HEM table - attached HEM tables for Q1 2023

Change 4

Added the below clarification (no policy change) to ‘Household Expenditure Measure (HEM) > Rules’:

Applicant's gross income for the HEM band is calculated based on the total:
- Gross annual salary / wages income (unshaded) plus
- Gross annual rental income (unshaded) less the higher of (customer declared investment property costs or 10% of gross unshaded rental income) less investment loan interest costs (where negative gearing has been used) plus
- All other gross annual income (unshaded)

Change 5

Added the below clarification (no policy change) to ‘Serviceability Repayment Amount > Study and Training Support Loans (STSL) e.g. HELP, SSL, ABSTUDY SSL, TSL, SFSS, HECS > Benchmark Repayment Amount calculation’:

‘Repayment Income’ used for this calculation is:
- Gross shaded declared taxable income less negative gearing deductions less the higher of (customer declared investment property costs or 10% of gross unshaded rental income)

Attachments

Attachment

03.17 HEM Remote Postcodes.xlsx

Attachments

Attachment

03.17 HEM Table.xlsx

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03.18 Special Packages - Accounting and Law Partners, and Executive Sector

Policy ID

03.18

Policy Name

Special Packages - Accounting and Law Partners, and Executive Sector

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Overview
2.2 Eligible Partner
2.2.1 Income and employment (Partner)
2.3 Eligible Senior Executive
2.3.1 Income and employment (Senior Executive)
2.4 Eligible applicant types and restrictions
2.5 Special conditions - LVR
2.6 Transfer of company debt to personal names in the consumer portfolio
3. Process to follow
3.1 How to instruction

1.About this policy

1.1 Why this policy?

This policy will help you identify if the Westpac Group will waive Lenders’ Mortgage Insurance (LMI) for a consumer mortgage application where the applicant(s) meet the eligibility criteria.

2. Rules you must apply

2.1 Overview
The policy outlined below sets out the parameters for accepting consumer mortgage proposals for:

- partners in certain qualifying Accounting and Law firms
- senior executives (CEO and their direct reports) in ASX Top 100 companies

The following allowable variances to standard consumer mortgage policy may be applied to eligible applicants, subject to meeting the conditions documented in this policy:

Applications may be assessed to a maximum LVR of 90% without mortgage insurance, refer to Special conditions - LVR
Confirmation and verification of 5% genuine savings is not required for applications where mortgage insurance is not required.
Income and employment:
- Partner
- Senior Executive
Transfer of company debt to personal names in the consumer portfolio

All other prevailing standard non-mortgage insured policies and product offerings for fully documented loans apply, including Interest Only repayment terms.

Any lower LVR threshold policies will override this policy refer to Loan to Value Ratio (LVR), with the exception of LVR limits on property values – refer to Special conditions - LVR.

There is no authority to extend the approved package arrangement to other occupation types or products.

This policy must be read in conjunction with the relevant policies contained in Consumer Mortgage Credit Policy Manual.

Note: Approval is not guaranteed in line with the maximum offerings available under this policy.

2.2 Eligible Partner

To be eligible for this policy the broker / assessor must confirm that the applicant is a Partner in one of the Law or Accounting firms as per the below table. Also see Income and Employment (Partner)

	Industry
	Law	Accounting
Firms	Allens Allens	Binder Kijker Otte - BDO
	Clayton Utz	Deloitte
	Corrs Chambers Westgarth	Ernst & Young
	Gadens	Grant Thornton
	Gilbert & Tobin	KPMG
	Herbert Smith Freehills	McGrath Nicol
	HWL Ebsworth Lawyers	Pitcher Partners
	King & Wood Mallesons	PKF
	Minter Ellison	PWC
	Norton Rose Fulbright	RSM Australia
		William Buck

2.2.1 Income and Employment (Partner)

Specific income verification rules apply. Refer to Income Verification policy > Self-employed Income > Partners from selected companies. Partnership status is confirmed during income verification.
All income must be received in AUD. A lower LVR threshold applies when foreign income is used. Refer to Loan to Value Ratio (LVR) > LVR by borrower type and income source.

2.3 Eligible Senior Executive

To be eligible for this policy the broker / assessor must confirm that the applicant is the CEO, or direct report of the CEO, of one of the Australian Stock Exchange (ASX) Top 100 companies.

2.3.1 Income and Employment (Senior Executive)

Employment is to be confirmed:
- in writing by the company’s Human Resources department, or
- via board reports, or
- other information available from the ASX.
Standard income verification requirements to be applied, as per the Verifying Income policy.
All income must be received in AUD. A lower LVR threshold applies when foreign income is used. Refer to Loan to Value Ratio (LVR) > LVR by borrower type and income source.

2.4 Eligible applicant types and restrictions

This policy is available for applications submitted for credit in the Partner / Senior Executive’s own name, or related company or trust entities provided direct ownership and / or directorship by the qualifying professional is evident.

Lending or property ownership may be in the name of the spouse or related entity, provided the Partner / Senior Executive’s is involved in the transaction, at least as a guarantor.

2.5 Special conditions - LVR

Feature	Maximum LVR (with no LMI)¹
Residential real estate security collateral market value is < or = $5.0 mil	90%
	90%
Residential real estate security collateral market value is > $5.0 mil to $5.6mil	Maximum borrowings $4.5 million¹
Residential real estate security collateral market value is > $5.6mil	80%
¹ Subject to a maximum of $7.5mil secured WBC / SGB / BoM / BSA exposure from loans with LVR > 80% without LMI
Other requirements For LVRs higher than the above levels, or where the applicant elects to pay mortgage insurance, applications will be subject to acceptance in terms of standard bank and Lender’s Mortgage Insurance policy(s).

2.6 Transfer of company debt to personal names in the consumer portfolio

'Company' debts are defined as those used for purchase or construction of residential and / or business premises.

Application type	Allowable variance
If LMI is not required under this policy	Requests to transfer a facility to personal name(s) will be accommodated where it can be established that a personal debt was obtained in a company name with the outstanding debt appearing on the company's latest balance sheet, and the collateral security is held in personal name(s). Refinance of business related lending purposes are specifically excluded. Broker / assessor is to verify the authenticity of the original transaction and provide appropriate submission notes in the origination system.
If LMI is not required under this policy	Standard policy applies - no allowable variance is available under this package offering

3. Process to follow

3.1 How to instruction

Enter a comment in ApplyOnline noting application submission under the ‘Accounting, Law & Executive Sector’ policy

Change History

Amendment number	Amendment issue date	Description of changes
1	2 July 2023	First OBP issue online for Brokers

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03.20 Special Packages - Industry Specialisation Sector

Policy ID

03.20

Policy Name

Special Packages - Industry Specialisation Sector

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Overview
2.2 Eligibility criteria
2.2.1 Eligible occupations, qualifications and employment
2.2.2 Eligible applicant types and restrictions
2.2.3 Income threshold eligibility
2.3 Income verification
2.4 Special conditions - LVR
2.5 Practice premises offered as security collateral
2.6 Transfer of company debt to personal names in the consumer portfolio
3. Process to follow
3.1 How to instruction

1. About this policy

1.1 Why this policy?

This policy will help you identify if the Westpac Group will waive Lenders’ Mortgage Insurance (LMI) for a consumer mortgage application where the applicant(s) meet the eligibility criteria.

2. Rules you must apply

2.1 Overview

The policy outlined below sets out the parameters for consumer mortgage application proposals originated by Brokers for:

eligible qualifying professionals within the Accounting and Law industries.

The following allowable variances to standard policy may be applied to eligible applicants, subject to meeting the conditions documented in this policy:

Applications may be assessed to a maximum LVR of 90%* without mortgage insurance - refer Special conditions - LVR
Confirmation and verification of 5% genuine savings is not required for applications where mortgage insurance is not required
Practice premises offered as security collateral
Transfer of company debt to personal names in the consumer portfolio

All other standard non-mortgage insured policies and product offerings for fully documented loans apply, including Interest Only repayment terms.

Any lower LVR threshold policies will override this policy including LVR limits on property value. Refer to Loan to Value Ratio (LVR).

Credit exceptions are not available for any occupations types not listed in Eligibility Criteria.

Note: Approval is not guaranteed in line with the maximum offerings available under this policy.

2.2 Eligibility criteria

The below policy relating to income and employment are applicable where LMI is eligible to be waived.
Where LMI is required, standard verification requirements are to be applied.

2.2.1 Eligible occupations, qualifications, employment

The applicant must:

be employed directly within the industry; and
be obtaining an income from their qualification; and
meet the qualifying occupation, employment criteria and policy (as outlined in the table below)

The broker must obtain confirmation of the applicant’s qualifications and employment, with a copy of the evidencing document or search retained in the loan application.

Industry	Qualifying Occupations	Qualifications & Employment criteria
Accounting Note: Applicant must be employed in one of the qualified occupations. Applicant is not restricted to any particular firm.	Accountants Actuaries / Auditors CFO’s (Chief Financial Officers) Finance Managers	Is registered to practice as a CA, CPA, CFA or FIAA in Australia, verified through evidence dated within the last 12 months of: Membership of the Chartered Accountants Australian and New Zealand (CAANZ), or Membership of CPA Australia (CPA), or Membership of the Chartered Financial Analyst Institute and associated Australia based society (CFA), or Current Fellowship of the Institute of Actuaries of Australia (FIAA), or Membership of the Institute of Public Accountants (IPA)
Legal Note: Applicant must be employed in one of the qualified occupations. Applicant is not restricted to any particular firm.	Barristers Judges Lawyers Solicitors	Must provide evidence dated within the last 12 months of Practising Certificate allowing them to practice as a lawyer, solicitor or barrister in the Australian State or Territory that they currently practice in. Employees of the Australian Government Solicitor under section 55Q of the Judiciary Act 1903 as well as judges have the right to practice law but are not required to hold a practicing certificate. These applicants qualify for the Industry Specialisation Policy but do not require evidence of a current Practising Certificate.

2.2.2 Eligible applicant types and restrictions

This policy is available for applications submitted for credit in the qualifying professional’s own name, or related company or trust entities provided direct ownership and/or directorship by the qualifying professional is evident. Lending or property ownership may be in the name of the spouse or related entity, provided the qualifying professional is involved in the transaction, at least as a guarantor.

Applicants must be:

Australian citizens, or
approved permanent visa holders (refer Lending to Non-Australian Citizens), or
approved temporary visa holders that are acceptable to the Bank and the Mortgage Insurer (refer Lending to Non-Australian Citizens)

Residency, citizenship and VISA status must be verified at the time the loan application is submitted.
Refer to the following policies, Lending to Non-Australian Citizens > Visa matrix > Acceptable Visas and Eligibility > Eligible Borrowers).

2.2.3 Income threshold eligibility

The qualifying professionals’ gross taxable income must be a minimum of $120,000 per annum.
If the application contains multiple qualifying professionals, the combined minimum gross taxable income of $120,000 per annum must be met.
Income from other sources e.g. rental income, may be used for serviceability assessment but cannot be used to meet minimum threshold of $120,000.

2.3 Income verification

For PAYG and self-employed applicants, standard income and employment verification is required to be undertaken as per normal policy requirements. Refer to Verifying Income or Self-employed applicants policy for further details.

All income must be received in AUD. Lower LVR threshold applies when foreign income is used. Refer to Loan to Value Ratio policy for further details.

2.4 Special conditions - LVR

The below policy relating to LVR are applicable where the applicant has met the eligibility criteria.
Where LMI is required, standard LVR policy applies.

Feature		Maximum LVR to TAE# of $4.0m (with no LMI) ¹
Owner occupied applicant's principle place of residence	Principle and Interest (P&I) repayment type	90%
Investment	Principle and Interest (P&I) repayment type	90%
Investment	Interest Only (IO) converting to Principle and Interest (P&I) repayment type	90%
¹ Subject to a maximum TAE (Total Approved Exposure) of $4m secured WBC Group (includes SGB / BOM / BSA / RAMS) exposure from loans with LVR >80% without LMI
Other requirements Security type must be residential, except where permitted under Practice Premises Offered as Security Collateral

2.5 Practice premises offered as security collateral

Application Type	Allowable variance
If LMI is not required under this policy	Practice premises that are a converted residential house, where documentation can be provided that confirms the collateral security is zoned for use as either business premises or residential occupation and can be easily converted back to residential accommodation, may be treated as residential housing. Care should be taken in these cases to ensure that the collateral security is valued as a residential property.
If LMI is required under this policy	Standard policy applies - no allowable variance is available under this package.

2.6 Transfer of company debt to personal names in the consumer portfolio

'Company' debts are defined as those used for purchase or construction of residential and/or business premises.

Application Type	Allowable variance
If LMI is not required under this policy	Requests to transfer a facility to personal name/s will be accommodated where it can be established that a personal debt was obtained in a company name with the outstanding debt appearing on the company's latest balance sheet, and the collateral security is held in the personal name/s. Refinance of working capital, equipment finance and all other business-related lending purposes are specifically excluded Broker will need to verify the original transaction and provide appropriate submission notes in ApplyOnline
If LMI is required under this policy	Standard policy applies - no allowable variance is available under this package.

3. Process to follow

3.1 How to instruction

Mortgage Brokers are to enter 'Industry Specialisation Policy' in the ApplyOnline application comments.

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	21 November 2021	Updated to replace the incorrect use of ‘exception’ or ‘exception to standard policy’ with ‘allowable variance’ or ‘allowable variance to standard policy’. Change is a clarification only, to clarify that where an application is approved under the criteria specified in this policy, an exception code is not required. No associated change to policy or risk appetite .
4	21 August 2022	Policy Standards and Procedure rewrite
5	2 October 2022	Update to content in 2.2.3 Eligible borrower types and restrictions Old wording Applicants must be: Australian citizens, or approved permanent visa holders (refer Migrant Lending), Residency, citizenship and VISA status must be verified at the time the loan application is submitted. New wording Applicants must be: Australian citizens, or Approved permanent visa holders (refer Lending to Non-Australian Citizens ) Residency, citizenship and VISA status must be verified at the time the loan application is submitted. (Refer to the following policies, Lending to Non-Australian Citizens > Visa matrix > Acceptable Visas and Eligibility > Eligible Borrowers).
6	2 July 2023	Change 1 Update to section ‘Eligible borrower types and restrictions’ to include Change 2 Replaced mathematical symbols ‘≤, =, >, <, ≥’ with equivalent words

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03.21 Special Packages - Medico Sector

Policy ID

03.21

Policy Name

Special Packages - Medico Sector

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Overview
2.2 Eligibility criteria
2.2.1 Eligible medical professionals
2.2.2 Qualification and employment
2.2.3 Eligible applicant types and restrictions
2.3 Income verification
2.4 Special conditions - LVR
2.5 Practice premises offered as security collateral
2.6 Transfer of company debt to personal names in the consumer portfolio

1. About this policy

1.1 Why this policy?

This policy will help you identify if the Westpac Group will waive Lenders’ Mortgage Insurance (LMI) for a consumer mortgage application where the applicant(s) meet the eligibility criteria .

2. Rules you must apply

2.1 Overview

The following allowable variances to standard consumer mortgage policy may be applied to eligible applicants, subject to meeting the conditions documented in this policy:

May be assessed to a maximum LVR of 90% of without mortgage insurance - refer to Special conditions - LVR
Confirmation and verification of 5% genuine savings is not required for applications whereby mortgage insurance is not required (as per above)
Income verification
Practice premises offered as security collateral
Transfer of company debt to personal names in the consumer portfolio

All other standard non-mortgage insured policies and product offerings for fully documented loans apply, including Interest Only repayment terms.

Any lower LVR threshold policies will override this policy, refer to Loan to Value Ratio (LVR), except LVR limits on property value refer to Special Conditions - LVR

No credit exceptions are available for any occupation types not listed under Eligiblity Criteria

This policy must be read in conjunction with the policies contained in the Consumer Mortgage Credit Policy.

Note: Approval is not guaranteed in line with the maximum offerings available under this policy

2.2 Eligibility criteria

The below eligibility rules relating to income, employment and LVR are applicable where LMI is eligible to be waived.
Where LMI is required, the usual policy including standard income verification requirements is to be applied.

2.2.1 Eligible medical professionals

For the purpose of this policy the definition of a medical professional ('medico') includes the following

Medical professional with no minimum income threshold:

Dentists
General Practitioners
Hospital - employed Doctors (e.g. Intern, Resident, Registrar, Staff Specialist)
Medical Specialists—refer to List of Australian Recognised Medical Specialties for the list of acceptable Medical Specialties
Optometrists
Pharmacists
Veterinary Practitioners

Medical professional with a minimum income threshold of $90,000 per annum:

Audiologist
Chiropractors
Midwife
Occupational therapist
Osteopath
Physiotherapists
Podiatrist
Psychologist
Radiographer
Registered Nurse
Sonographer
Speech Pathologist

2.2.2 Qualification and employment

Confirmation must be obtained of the applicant’s qualifications and employment as an eligible medical professional via one of the following:

- Most recent Australian income tax return or
- Copy of Australian university degree or qualification, or
- Copy of registration with the Medical Practitioners Board of Australia or equivalent body (copy of print out from the following web page is acceptable provided the registration is current http://www.ahpra.gov.au/Registration/Registers-of-Practitioners.aspx ).

A Sonographer, Speech pathologist and Audiologist do not require registration with AHPRA.

A Sonographer can also be verified through this website: https://www.asar.com.au/sonographer-info/find-a-sonographer/
A Speech pathologist must be registered as a "certified practising speech pathologist” (CPSP) with Speech Pathology Australia. CPSP can also be verified from a membership certificate
An Audiologist can also be verified through this website: https://audiology.asn.au/Consumer_Hub/Register_of_Audiology_Australia_Accredited_Audiologist_

The applicant must be obtaining an income from their medical qualification. A qualified medical professional working in medical research can be considered under this policy if the research field is the same as their area of medical qualification.

2.2.3 Eligible applicant types and restrictions

This policy is available for applications submitted for credit in the medico's own name, or related company or trust entities provided direct ownership and/or directorship by the medico is evident. Residential mortgage lending or property ownership may be in the name of the spouse or related entity, provided the medico is involved in the transaction, at least as a guarantor
Applicants must be:
- Australian citizens, or
- approved permanent visa holders (refer Lending to Non-Australian Citizens), or
- approved temporary visa holders that are acceptable to the Bank and the Mortgage Insurer (refer Lending to Non-Australian Citizens policy)
Residency, citizenship and VISA status must be verified at the time of submission of the loan application. (refer to the following policies, Lending to Non-Australian Citizens > Visa matrix > Acceptable Visas and Eligibility > Eligible Borrowers).

2.3 Income verification

All income must be received in AUD. A lower LVR threshold applies when foreign income is used. Refer to Loan to Value Ratio (LVR) > LVR by borrower type and income source.

Employment Type	Policy rules	Additional requirements for Medical professionals with a minimum income threshold
Self employed	In the case of established self-employed qualifying medical professionals: The income can be assessed by using the last completed personal income tax return; and Australian Taxation Office Notice of Assessment; or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal When assessed using the last completed personal income tax return the income stated on the income tax return is adequate Income tax returns may be used until May 31st each year, rather than limited to the normal policy requirement of May 15th. Single year tax returns must meet standard documentation policy and be provided for all related entities (company, trust and / or partnership). Where an application is being assessed under this policy with multiple applicants: If one of the applicants is self-employed but not an eligible medical professional, they must comply with Self-employed applicants > Rules you must apply. In the case of established self-employed qualifying medical professionals without an income threshold The income can also be assessed by using the Fast Track self-employed assessment method Note: when assessed under the Fast Track self-employed assessment method the full Fast Track criteria applies, if the latest income tax return has been provided to confirm qualifications then Fast Track assessment method is not available.	The following additional criteria apply for applicants where the minimum income threshold is $90,000 (gross) per annum: The income used to meet the income threshold requirement must be income from the applicants’ qualification. Fast Track Self-employed assessment method is not available If the application contains multiple qualifying professionals, the combined income of the qualifying professionals must meet the minimum $90,000 gross taxable income.

PAYG	For PAYG medicos, standard income and employment verification is required to be undertaken as per normal policy requirements - no allowable variance is available under this package.	The following additional criteria apply for applicants where the minimum income threshold is $90,000 (gross) per annum: The income used to meet the income threshold requirement must be income from the applicants’ qualification. Fast Track Self-employed assessment method is not available If the application contains multiple qualifying professionals, the combined income of the qualifying professionals must meet the minimum $90,000 gross taxable income.

2.4 Special conditions - LVR

Feature	Maximum LVR (with no LMI)¹	Maximum Loan amount (with no LMI)¹
IO not converting to PIF repayments	Standard Loan to Value Ratio (LVR) policy applies- LMI exemption is not available under this package offering
Non-residential collateral security, except where permitted under: ‘Practice premises offered as security collateral’
If the above restrictions do not apply:
PIF repayment	90%	$5 mil
IO converting to PIF repayments	90%	$5 mil
¹ Subject to a maximum of $7.5mil secured WBC/SGB/BoM/BSA exposure from loans with LVR greater than 80% without LMI

2.5 Practice premises offered as security collateral

Application Type	Allowable variance
If LMI is not required under this policy	Practice premises that are a converted residential house, where documentation can be provided that confirms the collateral security is zoned for use as either business premises or residential occupation and can be easily converted back to residential accommodation, may be treated as residential housing and an LVR of 85% is to apply up to a value of less than or equal to $5 million. Care should be taken in these cases to ensure that the collateral security is valued as a residential property.
If LMI is required under this policy	Standard policy applies - no allowable variance is available under this package.

2.6 Transfer of company debt to personal names in the consumer portfolio

'Company' debts are defined as those used for purchase or construction of residential and/or business premises.

Application Type	Allowable variance
If LMI is not required under this policy	Requests to transfer a facility to personal name/s will be accommodated where it can be established that a personal debt was obtained in a company name with the outstanding debt appearing on the company's latest balance sheet, and the collateral security is held in the personal name/s. Refinance of working capital, equipment finance and all other business-related lending purposes are specifically excluded Brokers will need to verify the original transaction and provide appropriate submission notes in ApplyOnline
If LMI is required under this policy	Standard policy applies - no allowable variance is available under this package.

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	21 November 2021	Updated to replace the incorrect use of ‘exception’ or ‘exception to standard policy’ with ‘allowable variance’ or ‘allowable variance to standard policy’. Change is a clarification only, to clarify that where an application is approved under the criteria specified in this policy, an exception code is not required. No associated change to policy or risk appetite .
4	3 April 2022	Added the following professions to the eligible medical professions with a minimum income threshold. Audiologist Occupational therapist Osteopath Podiatrist Psychologist Radiographer Sonographer Speech Pathologist
5	21 August 2022	Policy Standards and Procedure rewrite
6	2 October 2022	Change 1 Update to content in 2.2.3 Eligible borrower types and restrictions Old wording Applicants must be: Australian citizens, or approved permanent visa holders (refer Migrant lending ), or Temporary 482 TSS Medium-Term (MLTSSL) (previously known as 457 visa) visa holders Residency, citizenship and VISA status must be verified at the time of submission of the loan application New wording Applicants must be: Australian citizens, or approved permanent visa holders (refer Lending to Non-Australian Citizens policy ), or Temporary 482 TSS Medium-Term (MLTSSL) (previously known as 457 visa) visa holders Residency, citizenship and VISA status must be verified at the time of submission of the loan application (refer to the following policies, Lending to Non-Australian Citizens > Visa matrix > Acceptable Visas and Eligibility > Eligible Borrowers). Change 2 Added registered nurse and midwife to the list ‘Medical professional with a minimum income threshold of $90,000 per annum ’
7	20 November 2022	Change 1 Updated section ‘Income verification’ Old wording In the case of established self-employed qualifying Medical professionals The income can be assessed by using the last completed personal tax return and Australian Taxation Office Notice of Assessment New wording In the case of established self-employed qualifying Medical professionals The income can be assessed by using the last completed personal tax return; and Australian Taxation Office Notice of Assessment; or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal
8	2 July 2023	Change 1 Updated section ‘Eligible applicant types and restriction’ to allow ‘approved temporary visa holders that are acceptable to the Bank and the Mortgage Insurer (refer Lending to Non-Australian Citizens policy)’ Change 2 Replaced mathematical symbols ‘≤, =, >, <, ≥’ with equivalent words

Attachments

Attachment

03.21 Medical List of specialties Registration.pdf

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03.22 Special Packages - Employee (Staff) and Contractor Home Loan

Policy ID

03.22

Policy Name

Special Packages - Employee (Staff) and Contractor Home Loan

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Employee (Staff) and Contractor home loan benefits
2.2 Lenders mortgage insurance exemption criteria
3. Process to follow
3.1 How to instruction

1. About this policy

1.1 Why this policy?

This policy will help you identify if the Westpac Group will waive Lenders’ Mortgage Insurance (LMI) for a consumer mortgage application where the applicant(s) meet the eligibility criteria.

2. Rules you must apply

2.1 Employee (Staff) and Contractor home loan benefits

The Bank offers a range of benefits, designed to position employees and contractors as priority customers.

Eligibility

Home Loans with Westpac, St George, Bank of Melbourne and BankSA only (excludes RAMS).
Must be a current permanent employee or contractor. Ex-employees are not eligible for this offer.
Must be a packaged home loan.
Not available to company and trust account holders.
Must be Standard Variable Rate or Fixed Rate loan product (excludes Portfolio, Basic, SMSF loans etc.).
No minimum loan size required.

The following allowable variances to standard Consumer mortgage policy may be applied to eligible borrowers, subject to meeting the conditions documented in this policy :

Applications may be assessed to a maximum LVR of 90% without mortgage insurance. Refer to Lenders Mortgage insurance exemption criteria table > LVR

All other standard non-mortgage insured policies and product offerings for fully documented applications apply, including Interest Only repayment terms.

This policy must be read in conjunction with the policies and processes contained within the Credit Policy Manual and relates specifically to LMI exemption for eligible employees and contractors. This offer is not available in conjunction with any other special offers, or other packages offered by The Westpac Group.

Note: Approval is not guaranteed in line with the maximum offerings available under this policy.

2.2 Lenders mortgage insurance exemption criteria

Eligible employees and contractors will be exempt from Lender's Mortgage Insurance (LMI), where the below LMI exemption criteria are met.

Credit is subject to the Bank's normal lending criteria.

Feature	LMI exemption criteria
Employee	Must be employed within Westpac Group or its subsidiaries for a minimum of 1 month. Contract or temporary staff who do not have an ‘F’ or ‘M’ salary id are ineligible
Applicants	All must be a personal customer, reside in Australia and be Australian residents
Income / Employment	All income must be received in AUD. A lower LVR threshold applies when foreign income is used. Refer to Loan to Value Ratio (LVR) > LVR by borrower type and income source.
LVR	>80 - 90% LVR Any lower LVR threshold policies will override this policy including prestige property limits – refer to Loan to Value Ratio (LVR) policy.
Product	Eligible Products	Eligible repayment method¹
	Rocket Repay Home Loan	PIF
	Rocket Repay Investment Loan	PIF or IO
	Fixed Options Home Loan	PIF
	Flexi First Option Home Loan	PIF
	Flexi First Option Investment Loan	PIF or IO
	Fixed Rate Investment Property Loan	PIF or IO
¹ PIF = Principle, Interest and Fee repayments, IO = Interest Only repayment loan converting to Principle, Interest and Fee repayments

3. Process to follow

3.1 How to instruction

Enter a comment in ApplyOnline noting application submission under the ‘Employee (Staff) and Contractor Home Loan’ policy.
When entering the employment details of the staff member, you must capture the Employee ID to allow benefits to apply.

Change History

Amendment number	Amendment issue date	Description of changes
1	2 July 2023	First OBP issue online for Brokers

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03.23 Special Packages - Sports and Entertainment Sector

Policy ID

03.23

Policy Name

Special Packages - Sports and Entertainment Sector

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Overview
2.2 Eligibility criteria
2.2.1 Eligible Sports person
2.2.2 Eligible Entertainment person
2.2.3 Eligible applicant types and restrictions
2.3 Special conditions - LVR
3. Process to follow
3.1 How to instruction

1. About this policy

1.1 Why this policy?

This policy will help you identify if the Westpac Group will waive Lenders’ Mortgage Insurance (LMI) for a consumer mortgage application where the applicant(s) meet the eligibility criteria.
This package offering only applies to WBC brand and is not available to SGB / BoM / BSA

2. Rules you must apply

2.1 Overview

The policy outlined below sets out the parameters for accepting consumer mortgage proposals originated by Brokers for:

eligible Professional Sports and Entertainment persons.

The following allowable variances to standard policy may be applied to eligible applicants, subject to meeting the conditions documented in this policy:

Applications may be assessed to a maximum LVR of 90% without mortgage insurance - refer to Special conditions - LVR
Confirmation and verification of 5% genuine savings is not required for applications where mortgage insurance is not required.

All other standard non-mortgage insured policies and product offerings for fully documented applications apply, including Interest Only repayment terms.

Any lower LVR threshold policies will override this policy, including LVR limits on property values - refer to Loan to Value Ratio (LVR).

There is no authority to extend the approved package arrangement to other occupation types or products.

This policy must be read in conjunction with the policies and procedures contained in other sections of the Consumer Mortgage Credit Policy Manual.

Note: Approval is not guaranteed in line with the maximum offerings available under this policy.

2.2 Eligibility criteria

The target applicants must meet the Westpac Premium or Private Bank criteria or have the potential to meet the criteria within the near future.
Given the levels of criteria set from the outset, the Sector Policy will be most relevant to talent in their prime or high potential talent who have been identified as the stars of the future.

2.2.1 Eligible Sports person

For the purpose of this policy, eligible sports persons include the following:
- Professional athlete (all sports);
- Professional coach (all sports);
- Retired athlete still working within the sports or entertainment industry
To be classified as a Professional Sport and Entertainment Person, the talent must have an accredited Manager, Agent or Accountant. The responsibility for confirmation of this rests with the originating Broker

2.2.2 Eligible Entertainment person

For the purpose of this policy, eligible entertainment persons include the following:

Field type	Role type
TV Film Theatre Music Fashion	DJ Actor/Actress Musician/Singer/Composer Model Photographer/Film Maker Journalist Presenter Commentator Producer Director Writer/Author.

To be classified as a Professional Sport and Entertainment Person, the talent must have an accredited Manager, Agent or Accountant. The responsibility for confirmation of this rests with the originating Broker

2.2.3 Eligible applicant types and restrictions

This policy is available for applications submitted for credit in the applicant’s own name, or related company or trust entities provided direct ownership and / or directorship by the applicant is evident. Residential mortgage lending or property ownership may be in the name of the spouse or related entity, provided the applicant is involved in the transaction, at least as a guarantor.
Applicants must be:
- Australian citizens; or
- approved permanent visa holders (refer Lending to Non-Australian Citizens policy), or
- approved temporary visa holders that are acceptable to the Bank and the Mortgage Insurer (refer Lending to Non-Australian Citizens policy)
Residency, citizenship and VISA status must be verified at the time the loan application is submitted. (Refer to the following policies, Lending to Non-Australian Citizens > Visa matrix > Acceptable Visas and Eligibility > Eligible Borrowers)..

2.3 Special conditions - LVR

Feature		Maximum LVR to TAE# of $2.0m (with no LMI)¹
Owner occupied - applicant's principle place of residence only	Principle and Interest (P&I) repayment type²	90%
Investment	Principle and Interest (P&I) repayment type²	90%
Investment	Interest Only (IO) converting to Principle and Interest (P&I) repayment type	90%
¹ Subject to a maximum TAE (Total Approved Exposure) of $2m secured WBC Group (includes SGB / BOM / BSA / RAMS) exposure from loans with LVR > 80% without LMI
Other requirements Loans up to 90% with less than $750k secured WBC/SGB/BoM/BSA exposure from loans with LVR greater than 80% without LMI) may not require appropriate PAII (or income protection insurance) to be taken out in order for an MI waiver to be applied Loans up to 90% with $750,000 to $2,000,000 secured WBC/SGB/BoM/BSA exposure from loans with LVR greater than 80% without LMI) will require appropriate PAII (or income protection insurance) to be taken out in order for an MI waiver to be applied. Brokers must provide evidence of this within the submission For LVRs higher than the above levels, or where the customer elects to pay mortgage insurance, applications will be subject to acceptance in terms of standard bank and Lender’s Mortgage Insurance policy(s)

3. Process to follow

3.1 How to instruction

Enter 'PFSALPHA' in the ApplyOnline comments, and
Enter a comment noting submission under the ‘Alpha Sector Policy’

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	21 November 2021	Updated to replace the incorrect use of ‘exception’ or ‘exception to standard policy’ with ‘allowable variance’ or ‘allowable variance to standard policy’. Change is a clarification only, to clarify that where an application is approved under the criteria specified in this policy, an exception code is not required. No associated change to policy or risk appetite.
4	21 August 2022	Policy Standards and Procedure rewrite
5	26 March 2023	Remove Income Verification reference
6	21 May 2023	Under section ‘Overview’ -housekeeping change (no change to policy): Deleted redundant reference to 'Income Verification’
7	2 July 2023	Change 1 Updated section ‘Eligible applicant types and restrictions’ to: allow ‘approved temporary visa holders that are acceptable to the Bank and the Mortgage Insurer (refer Lending to Non-Australian Citizens policy)’ add instruction ‘Residency, citizenship and VISA status must be verified at the time the loan application is submitted. (Refer to the following policies, Lending to Non-Australian Citizens > Visa matrix > Acceptable Visas and Eligibility > Eligible Borrowers).’ Change 2 Replaced mathematical symbols ‘≤, =, >, <, ≥’ with equivalent words

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03.25 Genuine Savings, Equity and Customer Contribution

Policy ID

03.25

Policy Name

Genuine Savings, Equity and Customer Contribution

Policy Content

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Genuine savings
2.1.1 Amount to be verified
2.1.2 Acceptable 'Tier 1' sources of genuine savings
2.1.3 Eligibility for 'Tier 2' sources of genuine savings
2.1.4 Acceptable 'Tier 2' sources of genuine savings
2.1.5 Unacceptable sources of genuine savings
2.2 Verifying 10% equity requirement for Investment Loans
2.3 Customer contribution
2.3.1 Evidencing customer contribution
2.3.2 Acceptable sources of customer contributions
2.3.3 Unacceptable sources of customer contribution
2.3.4 Shortfall in customer contribution
3. Frequently asked questions

1. About this policy

1.1 Why this policy?

The purpose of this policy is to provide an overview of the following requirements for the consumer mortgage application:

genuine savings
customer contribution and funds to complete the loan transaction.

If the loan application requires mortgage insurance, refer to Lenders Mortgage Insurance, where required.

2. Rules you must apply

2.1 Genuine savings

Demonstrated genuine savings behaviour provides evidence of the borrower’s capacity to service the consumer mortgage loan application requested as well as a proven ability to meet regular commitments.

5% genuine savings must be verified on all consumer mortgage insured applications where the base LVR exceeds 90%.
Verification can be via either:

Acceptable ‘Tier 1’ sources
Acceptable ‘Tier 2’ sources

Evidence of genuine savings is to be retained on the file, refer to Recording evidence of genuine savings.
Also refer to Unacceptable sources of genuine savings.

2.1.1 Amount to be verified

Step	If this loan	Then
1	Is for the purchase of vacant land, and: there is also an application to construct a dwelling on the land	Verify 5% of the total of land purchase plus construction costs (regardless of the valuation result) Example: Land cost $200,000 plus construction costs $280,000 (build contract $280,000 plus additional works $20,000) = $500,000 Verify $25,000 genuine savings
2	Is a construction loan and: the security collateral is an established property or vacant land already owned for less than 3 months, and genuine savings was previously verified in the original application to purchase the security collateral **If the security collateral has been held for 3 months or more, apply scenario 4	Verify 5% of the valuation result The genuine savings verified in the original purchase application can be deducted from the total amount to be verified in the application to construct/renovate Example: Valuation result $500,000 for property being constructed: $25,000 total genuine savings required $10,000 was previously verified in the original vacant land purchase application: Verify $15,000 genuine savings in the application to construct ($25,000 total minus $10,000 previously verified)
3	Security Collateral is an established property or vacant land being purchased	Verify 5% of the contract of sale price (regardless of the valuation result) Example: Contract price $100,000: Verify $5,000 genuine savings
4	Security Collateral is an established property or vacant land already owned	Verify 5% of the security collateral value Refer to Security Collateral Value Assessment policy Example: Valuation result is $400,000 Verify $20,000 genuine savings
5	Security Collateral is a combination of: an established property or vacant land being purchased, and an established property or vacant land already owned	Verify 5% of the total of: the contract of sale price (regardless of the valuation result) for the purchase property, plus the security collateral value of the property already owned. Refer to Security Collateral Value Assessment policy Example: Contract of sale price $500,000 for purchase property plus valuation result $200,000 for property already owned equals $700,000: Verify $35,000 genuine savings

2.1.2 Acceptable 'Tier 1' sources of genuine savings

The below 'Tier 1' sources may be used singularly or in combination and:

must have been accumulated over or held for a minimum of 3 months (excluding Historical rental payments)
if combined, the total amounts verified must be a minimum of the required 5%
must be evident from the Responsible Lending Start Date
verification documents must comply with Document Standards

Tier 1 Sources and Conditions	Confirm	Verify by
Accessible Australian superannuation Must be held by a borrower	Accessible amount ($) Funds have been accumulated over or held for the required period Superannuation holder complies with conditions	Superannuation fund letter or Superannuation fund email advice
Additional Australian superannuation contributions above Superannuation Guarantee (SG) Must be held by a borrower	Contribution amount above SGC ($) Funds have been accumulated over or held for the required period Superannuation holder complies with conditions	Superannuation fund letter; or Superannuation fund email advice
Equity in property already owned located in Australia - offered as security collateral for this loan application and must only be owned by one or more borrower/s	Property ownership complies with conditions Property has been owned for the required period	Title search as obtained through normal loan assessment; or Council rates notice; or Utility Bill; or Settlement statement
	Property value	Valuation as obtained through normal loan assessment - Refer Security Collateral Value Assessment
	Balance of existing debt (if any) against the property	Documents as obtained through normal loan assessment - Refer Commitments policy > Confirm the details of the commitment
	Amount of equity in the property	Calculation required: Property value minus any existing debt balance
Equity in property already owned located in Australia - not offered as security collateral for this loan and must only be owned by one or more borrower/s	Property ownership complies with conditions Property has been owned for the required period	Title search as obtained through normal loan assessment; or Council rates notice; or Utility Bill; or Settlement statement
	Property value	Existing valuation process (to LMI standards), where property is mortgaged to Westpac Group - Refer Security Collateral Value Assessment AVM, but if no AVM result or customer estimate not validated by AVM, then use Residential Shortform Valuation
	Balance of existing debt (if any) against the property	Documents as obtained through normal loan assessment - Refer Commitments policy > Confirm details of the commitment
	Amount of equity in the property	Calculation required: Property value minus any existing debt balance
Historical rental payments for a property located in Australia Borrowers are currently renting Loan application must be for: an owner occupied residence the purchase of an established owner occupied dwelling, or the purchase of vacant land if there is also an application to construct an owner occupied residence on that land Loan application is not for an investment property purchase, alternate investment purpose or vacant land only All borrowers must have been renting for a minimum of the last 6 months 6 months satisfactory continuous rental payment history All tenants on the lease must be borrowers. Note: Rental ledger can be in one name if the loan application is for two borrowers who are spousal The rental property is leased through a licensed property manager /agent / letting agent (excludes family / private) Note: rent paid does not need to meet 5% of the purchase price	Tenant/s comply with conditions Tenancy period complies with conditions Rental payment history complies with conditions	Rental ledger from licensed real estate property manager / agent / letting agent, including confirmation of 6 months rental payment history; or Licensed real estate property manager's / agent's / letting agent's letter or email advice confirming actual rent, including confirmation of 6 months rental payment history
Loan payments above contracted repayment amount for a loan facility within Australia Payments must be to open Mortgage loans (excluding ‘Line of Credit’ products) or to open Term loans (secured and unsecured) available to use Loan must only be held in the name of one or more borrower/s	Account holder complies with conditions Additional payment amount/s ($) accumulated or held and available to use, evidenced by: Re-draw ($), available funds ($) Additional payments have been accumulated over or held for the required period Investigate large one-off deposits to determine if they should be assessed under Tier 2 or are unacceptable sources	Documents as obtained through normal loan assessment - Refer to Commitments policy > Confirm details of the commitment
Savings accumulated Must be: In a bank account held in an Australian Bank Only held in the name of one or more borrower/s	Account holder complies with conditions Amount accumulated ($) Savings have been accumulated over the required period Investigate large one-off deposits to determine if they should be assessed under Tier 2 or are unacceptable sources	Account statement; or Account transaction listing
Savings held Includes (but not limited to): Bank accounts, term deposits, debentures with a financial institution held in an Australian Bank Shares held in publicly listed companies held via an Australian Brokerage Firm or Australian online Trading Account Must be: Only held in the name of one or more borrower/s	Account holder complies with conditions Amount held ($) Savings have been held for the required period Investigate large one-off deposits to determine if they should be assessed under Tier 2 or are unacceptable sources	Account statement; or Account transaction listing; or Investment certificate; or Share registry statement
Deposit paid to Builder / Developer / Real estate agent	Funds have been held by the Builder / Developer or Real Estate Agent for a minimum of 3 months	Deposit receipt issued by the Builder / Developer or Real Estate Agent, evidencing: amount of deposit paid by one or more of the borrowers Date of payment
Deposit paid to Builder / Developer / Real estate agent	Prior to the deposit being paid to the Builder / Developer or Real Estate Agent the amount of the deposit paid (savings) was held in an account in the name/s of one or more of the borrower. Savings held Includes (but is not limited to): Bank accounts, term deposits, debentures with a financial institution held in an Australian Bank Shares held in publicly listed companies held via an Australian Brokerage Firm or Australian online Trading Account	Account statement; or Account transaction listing; or Investment certificate; or Share registry statement

2.1.3 Eligibility for 'Tier 2' sources of genuine savings

In order to use 'Tier 2' sources of genuine savings, the 'Tier 2' eligibility policy below must be met
Once the 'Tier 2' eligibility policy is satisfied, proceed to Acceptable 'Tier 2' sources of genuine savings

Tier 2 Eligibility and Conditions

Confirm

Verify by

Historical rental payments for a property located in Australia

Borrowers are currently renting

All borrowers must have been renting for a minimum of the last 3 months
3 months satisfactory continuous rental payment history

All tenants on the lease must be borrowers Note: Rental ledger can be in one name if the application is for two applicants who are spousal
Note: Rent paid does not need to meet 5% of the purchase price

Tenant/s comply with conditions
Tenancy period complies with conditions
Rental payment history complies with conditions

Rental ledger from licensed real estate property manager / agent / letting agent, including confirmation of 3 months rental payment history; or
Licensed real estate property manager's / agent's / letting agent's letter or email advice confirming actual rent, including confirmation of 3 months rental payment history

2.1.4 Acceptable 'Tier 2' sources of genuine savings

In order to use the 'Tier 2' sources of genuine savings, the 'Tier 2' eligibility policy (prior section) must be met.

The below 'Tier 2' sources may be used singularly or in combination and:

must have been accumulated over or held for less than 3 months otherwise they are to be assessed as 'Tier 1' sources
if combined, the total amounts verified must be a minimum of the required 5%
must be evident at the Responsible Lending Start Date
verification documents must comply with Document Standards

Tier 2 Sources and Conditions	Confirm	Verify by
Bonus/Commission (paid as salary /wage) Must be deposited into a bank account: within the last 3 months only held in the name of one or more borrower/s	Nature of payment Payment amount ($)	Payslip evidencing the nature of the payment and the amount
	Payment has been credited to a bank account within the required period Account holder complies with conditions	Account statement; or Account transaction listing
Dividend Must be deposited into a bank account held in an Australian bank: within the last 3 months only held in the name of one or more borrower/s	Nature of payment	Dividend advice evidencing the nature of the payment
	Payment amount ($) Payment has been credited to a bank account within the required period Account holder complies with conditions	Account statement; or Account transaction listing
Tax refund Must be deposited into a bank account held in an Australian bank: within the last 3 months only held in the name of one or more borrower/s	Nature of payment	Australian Tax Office Notice of Assessment detailing the amount of refund due
	Payment amount ($)	Account statement; or Account transaction listing

2.1.5 Unacceptable sources of genuine savings

Unacceptable sources of genuine savings

Bonus / Dividend / Commission received in a foreign currency
Borrowed funds / deposits (proceeds from personal loans or other borrowings)
Builder’s incentives rebate
Compensation payout proceeds
Cash holdings
Favourable purchase (not arm’s length)
FHOG (First Home Owners Grant) or any State Government assistance
Funds held in a business / company account
Funds held in a foreign bank account
Gift (of any kind) proceeds
Livestock sale proceeds
Vendor savings plans
Windfall proceeds e.g. lottery
Bank statements showing bulk deposits held for less than 3 months (if Tier 1 source)
Promissory notes / letters
Incentives for early completion
Marketing / cash back offers

2.2 Verifying 10% equity requirement for Investment Loans

Any Mortgage insured consumer mortgage application for investment loans that have a Total LVR >90% (inclusive of LMI premium) will require a minimum equity of 10% to be held in already owned property in Australia.
The 10% equity must be:

maintained post drawdown of the requested loan
not eroded through equity release or LMI premium capitalisation to assist with the completion of the requested loan.

Documents used to verify 10% equity must comply with Document Standards.

Confirm	Verify by
Property ownership Australian property must only be owned by one or more borrower	Title search or Council rates notice or Utility Bill
Property value	Use customer's estimated market value
Limit of existing debt (if any) against the property	Documents as obtained through normal consumer mortgage loan assessment - Refer Commitments policy > Confirm details of the commitment
Amount of equity in the property	Calculation required: property value minus any existing debt limit

2.3 Customer contribution

The customer contribution is the amount the borrower will need to pay to cover the difference between the purchase price (or construction cost or refinance cost) plus legal, mortgage insurance, stamp duty, and other fees, less the loan amount.

2.3.1 Evidencing customer contribution

The customer contribution must be:

available at the time of formal application, or comply with the policy detailed under Shortfall in customer contribution
shown in the statement of assets and liabilities
clearly indicated in the funding table
compliant with AML reporting requirements

If a low valuation reduces the available loan amount and increases the contribution amount, ensure:

the customer contribution is still sufficient
submission notes and funding table details are updated

2.3.2 Acceptable sources of customer contributions

Also refer to Unacceptable sources of customer contribution for further details

Application Type	Acceptable Sources
Mortgage insured loans	Once any genuine savings required has been verified, any additional customer contribution required may be from: Accessible superannuation, provided the borrower has met Australian Taxation Office and Superannuation Industry (Supervision) Act requirements, e.g. borrower is able to access a lump sum from their superannuation due to: Reached preservation age Under transition to retirement rules, while continuing work First Home Buyer Super Saver Scheme Bonus / commissions / dividends Cash holdings Compensation payouts (standard income verification requirements apply and ability for the borrower to meet standard employment and serviceability policy) First Home Owners Grant Gifts Inheritance Personal savings account Real estate equity (with any liability and loan repayment reflected in the consumer mortgage application) Sale of asset Sale of stocks / shares publicly listed in the borrower’s name Tax refund Term Deposit account Windfall
Non-mortgage insured loans	In addition to the sources listed as acceptable under 'Mortgage insured loans', customer contribution may be from: A source not listed under Unacceptable sources of customer contribution Loan from family or friends (with the liability and loan repayment reflected in the consumer mortgage application)

2.3.3 Unacceptable sources of customer contribution

Unacceptable sources (for both non-mortgage insured and mortgage insured loans)

Purchase or builder’s rebates either before or after purchase settlement
Incentives for early completion
Marketing / cash back offers
Promissory notes / letters
Vendor savings plans (can only be accepted by Credit as an exception – non-mortgage insured transactions only)
Loans from sources not specifically listed as 'acceptable' e.g. an unsecured personal loan from a financial institution (even if the liability and loan repayment are to be shown in the application)

2.3.4 Shortfall in customer contribution

If at the time of assessment, a shortfall in customer contribution is apparent, the consumer mortgage application may proceed where:

the shortfall can realistically be saved within the below generally accepted period allowed for settlement
the saving of the shortfall is consistent with the borrower/s current savings pattern
Credit approval is held for any shortfall >$2,000

Acceptable shortfall savings time limits
ACT	NSW	NT	QLD	SA	TAS	VIC	WA
4 weeks	6 weeks	4 weeks	4 weeks	4 weeks	4 weeks	8 weeks	4 weeks

3. Frequently asked questions

Question	Answer
When using an account statement for verification, do I need every page issued for that statement?	No You only need the pages which: Display the information you are verifying, and Enable you to comply with the Document Standards for an account statement

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

10 November 2021

Links updated

3 April 2022

Increased the base LVR when 5% genuine savings must be verified from >85% to >90%
Change to content in Verifying 10% equity requirement for investment loans. Clarification.
Old wording
Any application for investment loans that have a Total LVR >90% (inclusive of LMI premium) will require a minimum equity of 10% to be held in already owned property.
New wording
Any Mortgage Insured application for investment loans that have a Total LVR >90% (inclusive of LMI premium) will require a minimum equity of 10% to be held in already owned property.

22 May 2022

Clarification on acceptable Sources of Genuine Savings to exclude accounts and assets outside of Australia.
Added to “Unacceptable Genuine Savings”.
- Bonus/Dividend/Commission received in a foreign currency
- Funds held in a foreign bank account

21 August 2022

2 October 2022

Change 1
Policy Standards and Procedure rewrite
Change 2
Updated section ‘Unacceptable source of customer contribution’:

Deleted ‘Funds from COVID-19 early release of superannuation’
Rewording from: ‘Loans from other sources e.g. an unsecured personal loan even if the liability and loan repayment are to be shown in the application’ to: ‘Loans from sources not specifically listed as ‘acceptable’ e.g. an unsecured personal loan from a financial institution (even if the liability and loan repayment are to be shown in the application)’

20 November 2022

Change 1
New row added to section 2.1.2 Acceptable ‘Tier 1’ sources of genuine savings

Tier 1 sources and Conditions

Confirm

Verify by

Deposit paid to Builder / Developer / Real estate agent

Funds have been held by the Builder / Developer or Real Estate Agent for a minimum of 3 months

Deposit receipt issued by the Builder / Developer or Real Estate Agent, evidencing:
- amount of deposit paid by one or more of the borrowers
- Date of payment

Prior to the deposit being paid to the Builder / Developer or Real Estate Agent the amount of the deposit paid (savings) was held in an account in the name/s of one or more of the borrower.
- Savings held Includes (but is not limited to):
  - Bank accounts, term deposits, debentures with a financial institution held in an Australian Bank
  - Shares held in publicly listed companies held via an Australian Brokerage Firm or Australian online Trading Account

Note:

Borrowed funds for deposit payment are not permitted
The savings history evidence is required to ensure Vendor rebates are not being used to demonstrate genuine savings

Account statement; or
Account transaction listing; or
Internal system extract or enquiry or
Investment certificate; or
Share registry statement

Change 2
Update to 2.1.5 Unacceptable sources of genuine savings.
The below content has been deleted

Deposits paid to Builders, Developers and Real Estate Agents***

Note:
* Proceeds from gifts / sale of personal assets will qualify if held for three months (see the Acceptable Tier 1 and Tier 2 table above).
***Receipts for deposits may be considered by Credit if the following requirements are met:
Funds have been held by the Builder, Developer or Real Estate Agent for a minimum of 3 months. Provide a copy of the issued receipt.
Funds were not borrowed and the applicants can evidence the funds had been held in an account in their name prior to being paid to the Builders, Developers or Real Estate Agent.
Note:
The savings history evidence is required to ensure Vendor rebates are not being used to demonstrate genuine savings.

19 February 2023

Change 1
Updated section ‘Acceptable 'Tier 2' sources of genuine savings’. This is a clarification only change, as below sources were only available when LVR is < or =90%, and are redundant as Genuine Savings are only required when LVR is >90% ( due to April 2022 change):

Deleted the below sources and their associated conditions and verification requirements:

Rate this policy Submitting... Thank you for your feedback! There was an error with your submission. Please try again.	Published Date Published Date 19/02/2023

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03.27 Verifying Income

Policy ID

03.27

Policy Name

Verifying Income

Policy Content

1. About this policy
1.1 Why this policy?
1.2 Unacceptable Income
1.3 Income not used for servicing
1.4 Self-employed income, Directorships, Company shareholding, ABN
1.5 Verifying Income Quick Links
1.6 PAYG Salary or Wage - Definitions and Time in Employment
2. Rules you must apply
2.1 Verifying PAYG Income - Salary or Wage (AUD)
2.2 Verifying 'Other' PAYG - Salary or Wage Income (AUD)
2.3 Verifying Supplementary Income (AUD)
2.4 Verifying Self-employed Income (AUD)
2.5 Verifying Foreign Income and / or Foreign Employment
2.6 Income Documents - Standards and Retention
3. Process to follow
3.1 Assessing Base income
3.2 Assessing Base plus non-base income
3.3 Assessing Casual income or employment
3.4 Assessing Rental income
3.5 Assessing Miscellaneous salary or wage income
3.6 Assessing Supplementary income
3.7 Assessing Self-employed Income
3.8 Assessing Foreign income
3.8.1 Foreign income credit processes
3.8.2 Loan applications and approval where the applicant is earning foreign income
4. Frequently asked questions
4.1 Foreign income and employment - FAQs
4.2 Salary Sacrifice - FAQs
4.3 General - FAQs
5. Credit

1. About this policy

1.1 Why this policy?

Purpose	Identifies acceptable sources of income and their associated: assessment values conditions verification methods
Applicable to	Consumer mortgage applications where a borrower is seeking any of: new loan loan increase servicing / variation activity requiring a serviceability assessment
Exclusions	This policy does not apply to a Bridging ICAP loan with no end debt
Reading this policy	Unless specifically stipulated otherwise, the content applies to both non-mortgage insured (non-MI) and mortgage insured (MI) consumer mortgage loan applications
Associated policies	You may also need to refer to other lending policy rules, including but not limited to: Serviceability Assessment Document Standards Self-employed applicants Special Packages - Medico Sector Loan Application and Approval > Validation of information provided by the customer If the application requires mortgage insurance, where required refer to: Lenders Mortgage Insurance

1.2 Unacceptable Income

If the income is not listed, then it is unacceptable . Income not listed may be considered by Credit where:

appropriate mitigants to accept have been provided; and
evidence of the income can be obtained to complete verification
Credit will determine how the verification is to take place and the income calculation to be used.

1.3 Income not used for servicing

Applicants are not required to provide evidence of income where it is not used to service the loan, unless:

required for self-employed applicants as detailed under ‘Self-employed income, Directorships, company shareholding, ABN’ or
specifically requested by Credit on a case-by-case basis
Action required:
Where any income type is evident on a verification document but is not used, notes must be entered to explain why this is the case.
For PAYG Salary or Wage income, this includes using a lower base income figure and not using non-base income.

1.4 Self-employed income, Directorships, company shareholding, ABN

Self-employed income (including Trust distribution and company income / profitability) is required to be verified in conjunction with Self Employed Applicants policy
Where the borrower, income guarantor (WBC only) or borrower’s spouse (where using the apportioned household expense policy) has a directorship(s), shareholding or an ABN, as identified via Credit Bureau Reporting or other application checks, and the applicant is not being assessed under Fast Track, Brokers/ Assessors are required to undertake further investigation to identify if they must be assessed as self-employed. Refer to the Self-employed Applicants policy

1.5 Verifying Income Quick links

PAYG Salary or Wage income	Base Income (AUD)	Emergency Services Employee (AUD) - (excludes casual employment and dependant contractor)	Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions
	Base plus non-base income (AUD)	Family employee Family employee – permanent (AUD) Family employee – casual (AUD)	Salary / Wage - after tax or post tax deductions
	Bonus Income (AUD)
	Casual Income (AUD)	Stipend Income (AUD)
	Dependant Contractor (AUD)	Temporary Employment (AUD)
Supplementary income	Annuity (AUD)	Interest Income (AUD) - (other than from own company)	Returns from Self-managed Super Fund (SMSF) (AUD)
	Child Support Payments / Maintenance (AUD)	Private Pension income (AUD)	Social Security Income (AUD)
	Dividend from ASX listed shares (AUD) -(other than from own company)	Rental Income (AUD) Not an NDIS property	Superannuation Income (Retail, Industry, Public sector, or Corporate superannuation fund) (AUD)
	Fully maintained company car (AUD)	Rental income (AUD) From a NDIS SDA property
	Fringe Benefit income (AUD)	Rental income (AUD) Rent received on a short term basis
Self-employed income (AUD)	Director Fees (AUD) - (from own company)	Fully verified self-employed - Latest year income (AUD)	Medico assessment (AUD)
	Dividend (AUD) from own company	Fast Track Self-employed (AUD)	Partners from selected companies (AUD)
	Fully verified Self-employed - 2 year average (AUD)	Independent contractor (AUD)	Professional sportsperson (AUD)
Foreign income and / or foreign employment	Base salary or wage income (AUD) - from Foreign Employment	Foreign Pension	Foreign Self-Employed
Foreign income and / or foreign employment	Base salary or wage income (Foreign)	Foreign Rental Income	Foreign Self-Employed

1.6 PAYG Salary or Wage income - Definitions and Time in Employment

Note: In some cases, the ‘Time in employment Rules’ will differ to the period over which the income is required to be verified.

Employment / Income Type	Definition	Time in Employment Rule
Employment / Income Type	Definition	Non- Mortgage insured	Mortgage insured
Bonus income	Refer 'Bonus Income (AUD)'	Minimum 2 years with same employer
Casual employment or income	Refer to ‘Casual income’	Minimum 6 months continuous service with the same employer (or employment agency)
Dependant Contractor employment	Refer to ‘Dependant Contractor’ The definition instructs whether to assess as a: Dependant contractor, or Casual	If assessed as: Dependant Contractor: Minimum 6 months continuous service with the same employer (or employment agency) Casual: As per ‘Casual’
Emergency Services Employee – when the Emergency Services Employee method is being used	Refer to ‘Emergency services Employee’	As per ‘Full Time or ‘Part Time’
Family employee	Refer to ‘Family Employee’	If Full time or Part Time: As per ‘Full Time or Part Time’ If Casual: Minimum 6 months continuous service with the same employer	If Full time or Part Time: As per ‘Full Time or Part Time’ If Casual: Minimum 6 months continuous service with the same employer, and 12 months minimum employment history (inclusive of the current employment) with no greater than a 1 month gap between current and previous job (does not have to be in the same role)
Full Time or Part Time employment	Full time: Usually 32 hours or more of work per week Work is regular and ongoing Part time: Usually less than 32 hours of work per week Work is regular and ongoing. The weekly hours worked would vary little or not at all.	No minimum	3 months minimum length in current employment If less than 3 months in current employment must have a record of total employment history in the same occupation of at least 12 months, with a maximum 2-month gap between positions.
Second employment (Full, Part-time (Multiple Permanent Jobs), Casual)	More than one employment source	As per associated employment listed in this table	Primary employment – as per associated employment type listed in this table; and Secondary employment - Minimum 1 year in current secondary employment
Temporary employment	Refer to ‘Temporary Employment’ The definition instructs whether to assess as a: Dependant contractor, or Casual	If assessed as: Dependant Contractor: As per ‘Dependant contractor’ Casual: As per ‘Casual’

2. Rules you must apply

The below standards are the minimum requirements for income to be verified.

2.1 Verifying PAYG Salary or Wage Income

Base Income (AUD)

Base Income (AUD) using payslips
Base Income (AUD) using Direct Salary Credits

Definitions and ‘time in employment’ rules

Base Income: A regular fixed income from salary or wages excluding bonus payments, overtime, allowances, commissions, etc.

Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment

Exclusions

Not applicable to

family employees
casual income
borrower or income guarantor being assessed under the Emergency Services Employee method
borrower or income guarantor receiving PAYG income from own company / business – refer to Self Employed Applicants policy
foreign employment

Base Income (AUD) using payslips
DOCUMENTS
1 YTD payslip covering last 2 pay cycles Where this cannot be provided: Last 2 consecutive payslips (can be YTD or non-YTD). OR Where the above documents cannot be provided due to: A recent increase to their base income (i.e. consecutive payslips have different base income amounts or the YTD earnings do not support the annualisation of the new base income), or Having recently commenced new employment* Then: 1 payslip detailing the new base income (may be a YTD or non-YTD payslip); and Employer’s letter / Employer’s email advice / Employment contract – for general use. In addition to meeting the requirements in Document Standards policy, the document must support the new gross base income / employment as shown on the payslip *Note: Any minimum time in employment requirement must be met for mortgage insured loans
ASSESSMENT / INCOME CALCULATION
Annualised base salary from payslip assessed at 100%
ADDITIONAL CONDITIONS
Varying base hourly rate or hours on document	Use the lowest: hourly rate, and number of paid hours excluding unpaid leave
Base Income not available on document	Verify income using Casual method (casual time in employment rules do not apply where full-time or part-time employed )
Salary Sacrifice / Fringe Benefit / Pre-Tax deductions	If documents indicate any pre-tax deductions, refer to Salary Sacrifice / Fringe Benefit / Pre-Tax deductions

Base Income (AUD) using Direct Salary Credits
DOCUMENTS
Any of the below covering the latest 3 months: Westpac Group or Other Financial Institution (OFI): Account statement; or Account Summary / Extract / Overview; or Account Transaction listing The salary credit description must specify the employer name, and Salary credit can be split between Westpac Group Brands or multiple other financial institutions, and The most recent salary credit must not exceed minimum age of document requirements as per Document Standards policy
ASSESSMENT / INCOME CALCUALTION
Annualised base salary from lowest salary credit - assessed at 100%
ADDITIONAL CONDITIONS
Eligibility	This method cannot be used if salary credit includes: non-base income; or bonus income
Income Frequency	The supporting document must confirm the frequency and cycle of salary credits align with the customer declared information
Salary Credit Variance	If there is a variance between salary credits, the lowest salary credit must be used for serviceability assessment. The maximum variances allowed is: 1 variance where the pay cycle is monthly 2 variances where the pay cycle is fortnightly 4 variances where the pay cycle is weekly If above is not met, assess as per ‘Base Income using payslips’

Base plus Non- Base Income (AUD)

Base plus non-base income (AUD) – Standard
Base plus non-base income (AUD) – Non-standard ‘Base income increase’

Definitions and ‘time in employment’ rules

Non-base income:

forms part of the total remuneration in addition to the base salary or wages.
can vary in consistency and frequency of payment to base salary or wages
Includes:
- Car allowances
- Director fees (other than from own company)
- Commissions
- Overtime
- Shift allowances
- Specific industry payment (all allowances)

Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment

Exclusions

Not applicable to

family employees
casual income
borrower or income guarantor being assessed under the Emergency Services Employee method
borrower or income guarantor receiving PAYG income from own company / business – refer to Self Employed Applicants policy
foreign employment

Base Plus Non-base income (AUD) - Standard
DOCUMENTS
YTD Payslip – covers a minimum of 3 months	1 YTD payslip covering a minimum of 3 months and detailing base income (non-base income is evidenced by the YTD figure)
YTD Payslip – covers less than 3 months	Where YTD payslip covers 2 pay cycles 1 YTD payslip from current financial year detailing base income, covering last 2 pay cycles. Non-base income is evidenced by the YTD figure, and One of the following documents from immediately previous financial year and from the same employer as listed on above payslip: Final YTD payslip from immediately previous financial year and from the same employer as detailed on the payslip, or Latest tax ready ATO Income Statement; or Latest PAYG payment summary; or Latest Australian tax return and Australian Taxation Office Notice of Assessment; or ATO Pre-filling report from an authorised tax agent. It is not mandatory to hold all pages of the document, but the pages held must display the ‘Taxpayer details’ and ‘PAYG Payment summaries’ Where YTD payslip covers 1 pay cycle 1 YTD payslip from current financial year detailing base income, covering 1 pay cycle, and Final YTD payslip from immediately previous financial year and from the same employer as listed on the above payslip Where combined documents do not cover a minimum of 3 months, assess as per base income
Non-YTD Payslip	Where ATO YTD statement covering 3 months can be provided 1 non-YTD payslip detailing base and non-base income, and ATO YTD income statement covering both a minimum of 3 months and the same pay period (pay date) as the non-YTD payslip. Non-base income is evidenced by the ATO YTD figure Where ATO YTD statement can be provided covering less than 3 months 1 non-YTD payslip from current financial year detailing base income, and ATO YTD Income statement covering both the last 2 pay cycles and the same pay period (pay date) as the non-YTD payslip. Non-base income is evidenced by the ATO YTD figure AND One of the following documents from previous financial year and from the same employer as listed on the above payslip: Latest tax ready ATO Income Statement, or Latest PAYG payment summary; or Latest Australian tax return and Australian Taxation Office Notice of Assessment; or ATO Pre-filling report from an authorised tax agent. It is not mandatory to hold all pages of the document, but the pages held must display the 'Taxpayer details' and 'PAYG Payment summaries' Where ATO YTD statement cannot be provided Last 2 consecutive non-YTD payslips from current financial year detailing base and non-base income, or For pay cycles from 1 July to 30 Sept only (due to new financial year): most recently issued payslip from current financial year and the final payslip from the immediately previous financial year both documents must be consecutive AND One of the following documents from previous financial year and from the same employer as listed on the above payslip: Latest PAYG Payment Summary; or Latest tax ready ATO Income Statement; or Latest Australian tax return and Australian Taxation Office Notice of Assessment; or ATO Pre-filling report from an authorised tax agent. It is not mandatory to hold all pages of the document, but the pages held must display the ‘Taxpayer details' and 'PAYG Payment summaries’ Where combined documents do not cover a minimum of 3 months, assess as per base income
ASSESSMENT / INCOME CALCULATION
Annualised base assessed at 100%, annualised non-base assessed at 80% Bonus income is excluded from the below calculations, except where specified as included
YTD Payslip covers a minimum of 3 months	Non-base income = YTD annualised income less annualised base
Non-YTD Payslip, and ATO YTD Income statement covers minimum 3 months
YTD Payslip – covers less than 3 months	When current year annualised income (including bonus) is: > prior year total gross income, then non-base income (including bonus) is: Total combined gross income from current and prior year, divided by the number of pay cycles covered by current and prior year documents, multiplied by the number of pay cycles in a year, less the current annualised base income < prior year total gross income, then non-base income (including bonus) is the lower of: Current year annualised income less current annualised base income, or Prior year total gross income less current annualised base income
Non-YTD Payslip, and ATO YTD Income statement covers less than 3 months
Non-YTD Payslip with no ATO YTD Income statement	Lower of: Payslip with lowest gross income annualised less annualised current base income, or Previous year income less annualised current base income
ADDITIONAL CONDITIONS
Varying base hourly rate or hours on document	Use the lowest: hourly rate, and number of paid hours excluding unpaid leave
Base income not available on document	Verify income using Casual method (casual time in employment rules do not apply where full-time or part-time employed )
Salary Sacrifice / Fringe Benefit / Pre-Tax deductions	If documents indicate any pre-tax deductions, refer to Salary Sacrifice / Fringe Benefit / Pre-Tax deductions
If Bonus Income is also being used for serviceability	Refer to Bonus Income (AUD)

Base Plus Non-base income (AUD) - Non-Standard ‘Base income increase’ Optional method
*Document(s) cover a minimum 3 months current financial YTD, and* *Base income increased in the current financial year*
DOCUMENTS
YTD Payslip	1 YTD payslip from current financial year showing final full pay period with lower base income, and* 1 YTD payslip from current financial year covering a minimum of 3 months showing full pay period with higher base income. Non-base income is evidenced by the YTD figure *This document can exceed Document standards > Age of document requirements
Non-YTD Payslip	1 non-YTD payslip from current financial year showing final full pay period with lower base income, and* 1 non-YTD payslip from current financial year showing full pay period with higher base income, and ATO YTD Income statement from current financial year covering: a minimum of 3 months, and the same pay period (pay date) as the non-YTD payslip showing higher base income. Non-base income is evidenced by the ATO YTD Income statement figure. *This document can exceed Document standards > Age of document requirements
*Documents(s) cover less than 3 months current financial YTD, and* *Base income increased:* *in previous financial year, or* *on 1 July, or* *between 2 July to 30 Sep*
YTD Payslip	1 YTD payslip from current financial year showing full pay period with higher base income. Non-base income is evidenced by the YTD figure And: Where base income increased in previous financial year: 1 YTD payslip from immediately previous financial year showing final full pay period with lower base income, and Final YTD payslip from immediately previous* financial year showing full pay period with higher base income (which is consistent with payslip from current financial year)* Where base income increased 1 July: Final YTD payslip from immediately previous financial year showing final full pay period with lower base income* Where base income increased between 2 July and 30 September Final YTD payslip from immediately previous financial year showing full pay period with lower base income, and 1 YTD payslip from current* financial year showing full pay period with lower base income* This document can* exceed Document standards > Age of document requirements
Non-YTD Payslip	1 non-YTD payslip from current financial year showing full pay period with higher base income; and ATO YTD Income statement from current financial year covering same pay period (pay date) as the current financial year non-YTD payslip it is supporting. Non-base income is evidenced by the ATO YTD figure, and Latest tax ready ATO Income Statement from the immediately previous financial year. Non-base income is evidenced by the YTD figure And: Where base income increased in previous financial year: 1 non-YTD payslip from the immediately previous financial year showing final full pay period with lower base income, and* Final Non-YTD payslip from the immediately previous financial year showing full pay period with higher base income* Where base income increased 1 July: Final non-YTD payslip from the immediately previous financial year showing full pay period with lower base income * Where base income increased between 2 July and 30 September Final non-YTD payslips from the immediately previous financial year showing full pay period with lower base income, and* 1 non-YTD payslip from current financial year* showing final full pay period with lower base income *This document can exceed Document standards > Age of document requirements
ASSESSMENT / INCOME CALCULATION
Annualised base assessed at 100%, annualised non-base assessed at 80% Bonus income is excluded from the below calculations, except where specified as included below
*Document(s) cover a minimum 3 months current financial YTD, and:* Base income increased in the current financial year	Non base income = YTD Gross income less YTD base income* and then annualised *Determined by calculating the lower base over the number of pay cycles at the lower base and higher base over the number of pay cycles at the higher base
*Document(s) cover less than 3 months current financial YTD, and:* Base income increased: in previous financial year, or on 1 July, or between 2 July to 30 Sep	Where current year annualised income (including bonus) is: greater than prior year total gross income (including bonus), then: Non-Base income = Prior year PAYG gross income less prior year annualised base income ¹ plus current year Gross YTD income less YTD base income, divided by the number of pay cycles covered by both the current and prior income documents, multiplied by the number of pay cycles in the year (to return to an annual figure) less than prior year total gross income (including bonus), then* Non-base income is the lower of: current year annualised income less current annualised base income, or prior year total gross income less current annualised base income
ADDITIONAL REQUIREMENTS
Eligibility	This method cannot be used where: serviceability is able to be demonstrated using another available method borrower or income guarantor has not been employed for a minimum of 3 months across both financial years with the same employer. Where time frame is not met, assess as per ' Base income' the borrower or income guarantor is transitioning between financial years and their annualised current financial YTD income is less than the immediately prior financial year's total income. borrower or income guarantor is being assessed under Family Employee
Varying base rate or hours on document	Use the lowest: hourly rate, and number of paid hours excluding unpaid leave
Emergency Services employee	If this method is used for an Emergency Services Employee all non-base income will be shaded to 80%
Salary Sacrifice / Fringe Benefit / Pre-Tax deductions	If documents indicate any pre-tax deductions, refer to Salary Sacrifice / Fringe Benefit / Pre-Tax deductions
If Bonus Income is also being used for serviceability	Refer to Bonus Income (AUD)

2.2 Verifying ‘Other’ PAYG Salary or Wage Income
Bonus income (AUD)		Stipend income (AUD)
Casual income (AUD)
Dependant contractor (AUD)		Temporary employment (AUD)
Emergency services employee (AUD)		Salary Sacrifice / Fringe Benefit deduction / Pre- Tax deductions
Family Employee Family Employee - Full Time or Part Time (AUD) Family Employee - Casual (AUD)		After tax / post tax deductions
Exclusions	Not applicable to borrower or income guarantor receiving PAYG income from own company / business – refer to Self Employed Applicants policy foreign employment

Bonus Income (AUD)
Definitions and ‘Time in Employment’ rules	A bonus is an additional payment given to an individual, typically in additional to their regular salary or wage. Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment
Exclusions	Not applicable to borrower or income guarantor receiving PAYG income from own company / business – refer to Self Employed Applicants policy foreign employment
DOCUMENTS
Payslip(s) evidencing the bonus payment(s)
ASSESSMENT / INCOME CACLUALTION
assessed at 80%

Casual Income (AUD) Doesn't get paid sick or annual leave
Definitions and ‘Time in Employment’ rules	Casual: Has no guaranteed hours of work May work irregular hours Can end employment without notice, unless notice is required by a registered agreement, award or employment contract Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment
DOCUMENTS
YTD Payslip - covering minimum 3 months YTD	1 YTD payslip covering a minimum of 3 months of the current financial year
YTD Payslip - covering less than 3 months YTD	1 YTD payslip covering last 2 pay cycles from the current financial year, and one of the following from the immediately previous financial year: the final YTD payslip, or Latest PAYG Payment Summary, or Latest tax ready ATO Income Statement, or Latest Australian tax return and Australian Taxation Office Notice of Assessment OR For pay cycles from 1 July to 30 Sept only (due to new financial year): Where the YTD payslip does not cover 2 pay cycles of the current financial year: 1 YTD payslip from current financial year detailing base income, and Final YTD payslip from the immediately previous financial year, and both documents must be consecutive and from the same employer
Non-YTD Payslip	Last 2 consecutive payslips from the current financial year, or For pay cycles from 1 July to 30 Sept only (due to new financial year): Where the 2 consecutive payslips are not the current financial year: the most recently issued payslip from the current financial year, and the final payslip from the immediately previous financial year, and both documents must be consecutive and from the same employer AND One of the following from the immediately previous financial year Latest PAYG Payment Summary or Latest tax ready ATO Income Statement; or Latest Australian tax return and Australian Taxation Office Notice of Assessment
Direct Salary Credits	This method cannot be used if any of the current financial year or previous financial year documents include bonus income One of the following from the current financial year: Account transaction listing produced internally from a Westpac Group system covering the latest 2 pay periods, with specific employer name included in the credit narrative, or Account statements from other financial institution covering the latest 2 pay periods with specific employer name included in the credit narrative or For non-mortgaged insured only: Account transaction listing from another financial institution and Account statement collectively covering the latest 2 pay periods. With specific employer name included in the credit narrative AND one of the following from the immediately previous financial year: the final YTD , or Latest PAYG Payment Summary, or Latest tax ready ATO Income Statement, or Latest Australian Tax return and Australian Taxation Office Notice of Assessment WARNING: Take care when assessing contract income paid to an account, as it may be a net or gross figure.
ASSESSMENT / INCOME CACLCULATION
Bonus income is excluded from the below calculations Income is: Annualised over 40 weeks for teachers and 48 weeks for other employees Assessed at 100%:
YTD payslip – covering minimum 3 months YTD	Annualised current financial YTD income
YTD Payslip - covering less than 3 months YTD	Lower of: annualised current financial YTD income, and annual previous financial year income
Non-YTD payslip Direct salary credits	Lower of: annualised current financial year income (using lowest salary credit to account/gross payment on payslips), and annual previous financial year income
ADDITIONAL CONDITIONS
Varying pay on document(s)	Use the lowest value, if: two salary credits to account differ, or two gross payments on the non-YTD payslips differ
If Bonus Income is also being used for serviceability	Refer to Bonus Income (AUD)

Dependent Contractor (AUD)
Definitions and ‘Time in Employment’ rules	Dependant Contractor: Persons employed on a commercial contract but with work arrangements consistent with them being an employee will be classified as a dependant contractor. For policy assessment purposes all Dependant Contractors: Have a regular number of contracted hours either working full time or part time Have access to annual leave and sick leave* May not subcontract the work out to another party Have all income taxes, deductions and superannuation paid by the employer Do not take any commercial risk i.e. the employer is legally responsible for the work done Do not direct how the work is done i.e. the employer has the right to direct how the work is completed Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment
DOCUMENTS
If the contractor: Has access to annual leave and sick leave, assess as per: Base Income, or Base plus non-base income (standard or non-standard method), or Bonus Income (AUD) Does not have access to annual leave and sick leave, assess as per: Casual Income (AUD) AND Employment contract; or Employer's email; or Employer's letter Document must confirm contract term, contract expiry date and if the contract includes annual leave and sick leave entitlements.
ASSESSMENT / INCOME CACLUALTION
As applicable to the income verification method used: Base Income, or Base plus non-base income (standard or non-standard method), or Bonus Income (AUD); or Casual Income (AUD)
ADDITIONAL CONDITIONS
Refer to ‘Additional Conditions’ applicable to the income verification method used: Base Income, or Base plus non-base income (standard or non-standard method), or Bonus Income (AUD); or Casual Income (AUD)

Emergency Services Employee (AUD) Optional (Brokers can choose to process under an alternate PAYG Salary or Wage method)
Definitions and ‘Time in Employment’ rules		Emergency Services Employee: A person employed as a: Front-line Fire Officer and / or front-line Fire Fighter; Front-line Police Officer; Front-line Ambulance Officer and / or front-line Paramedic; Hospital employed medical staff limited to: Nurse Doctor Surgeon Specialist Excludes: Casual Dependant contractor Temporary Self-employed Office based emergency services staff non-hospital based employment positions (e.g. nurses / doctors) Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment
DOCUMENTS
YTD payslip	1 YTD payslip (Group 1A) from current financial year covering last 2 pay cycles AND one of the following from immediately previous financial year and same employer: Final YTD, or Latest PAYG Payment Summary, or Latest tax ready ATO income statement, or Latest Australian tax return and Australian Taxation Office Notice of Assessment
Non-YTD payslip	Last 2 consecutive payslips from current financial year AND one of the following from immediately previous financial year and same employer: Latest PAYG Payment Summary, or Latest tax ready ATO income statement, or Latest Australian tax return and Australian Taxation Office Notice of Assessment
ASSESSMENT / INCOME CALCULATION
Base Income and Non-base income 100% Bonus income is excluded from the below calculations
YTD Payslip	Lower of: annualised current financial YTD income, and annual previous financial year income
Non-YTD Payslip	Lower of: annualised current financial year income (using lowest gross payment across payslips), and annual previous financial year income
ADDITIONAL CONDITIONS
Varying base hourly rate or hours on document	Use the lowest: hourly rate, and number of paid hours excluding unpaid leave
Base income not available on document	Verify income using Casual method (casual time in employment rules do not apply where full-time or part-time employed)
Salary Sacrifice / Fringe Benefit / Pre-Tax deductions	If documents indicate any pre-tax deductions, refer to Salary Sacrifice / Fringe Benefit / Pre-Tax deductions
If Bonus Income is also being used for serviceability	Refer to Bonus Income (AUD)

Family Employee
Definitions			Family employee - Non-spousal family member of the business owner Borrower or income guarantor has PAYG income from a family owned business and is not an owner of the business. Family employee - Spouse of business owner Borrower or income guarantor has PAYG income from a business wholly or partially owned by their spouse. Borrower or income guarantor is not an owner of the business. In all cases An owner of the business must be assessed as self-employed. Refer to Self-employed.
Family Employee - Full Time or Part Time (AUD) Family employee - Spouse of business owner (optional method) If the family employee’s spouse: is: a co-borrower or income guarantor or assessed under Serviceability Assessment policy > Apportioned household expenses and shared commitments – Spousal same household on the new loan, in lieu of using this assessment method, the family employee may be assessed as as self-employed, using the same self-employed income assessment method used to verify their spouses’ income, e.g. fully verified, Fast Track
Definitions and ‘Time in Employment’ rules	Family employee Full Time or Part Time: Refer to PAYG salary or wage - Definitions and Time in Employment > Full Time or Part Time Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment
DOCUMENTS
Last 2 consecutive payslips from current financial year and same employer detailing base and non-base income, or For pay cycles from 1 July to 30 Sept only (due to new financial year): Where the 2 consecutive payslips are not the current financial year: the most recently issued payslip from the current financial year, and the final payslip from the immediately previous financial year, and both documents must be consecutive and from the same employer AND Australian Business Number Registration Search via ABN Lookup AND one of the following from immediately previous financial year and same employer: Latest tax ready ATO Income Statement; or Latest Australian tax return and Australian Taxation Office Notice of Assessment
ASSESSMENT / INCOME CALCULATION
Base Income 100%, non-base income 80% Bonus income is excluded from the below calculations The income calculated may not exceed the total income in the previous year Australian tax return and ATO NOA or tax ready income statement
Non-Base income = Lower of a) payslip with lowest gross annualised or b) previous years income, then less annualised base income.
ADDITIONAL CONDITIONS
Varying base hourly rate or hours on document		Use the lowest: hourly rate, and number of paid hours excluding unpaid leave
Base income not available on document		Verify income using Family Employee- Casual method (casual time in employment rules do not apply where full-time or part-time employed)
Salary Sacrifice / Fringe Benefit / Pre-Tax deductions		If documents indicate any pre-tax deductions, refer to Salary Sacrifice / Fringe Benefit / Pre-Tax deductions
If Bonus Income is also being used for serviceability		Refer to Bonus Income (AUD)

Family Employee - Casual (AUD)
Definitions and ‘Time in Employment’ rules	Family employee Casual: Refer to Verifying ‘Other’ PAYG Salary or wage > Casual (AUD) Time in employment: Refer to PAYG salary or wage - Definitions and Time in Employment
DOCUMENTS
Last 2 consecutive payslips from current financial year and same employer detailing base and non-base income, or For pay cycles from 1 July to 30 Sept only (due to new financial year): Where the 2 consecutive payslips are not the current financial year: the most recently issued payslip from the current financial year, and the final payslip from the immediately previous financial year, and both documents must be consecutive and from the same employer AND Australian Business Number Registration Search via ABN Lookup AND one of the following from immediately previous financial year and same employer Latest tax ready ATO Income Statement, or Latest Australian tax return and Australian Taxation Office Notice of Assessment
ASSESSMENT / INCOME CALCULATION
Bonus income is excluded from the below calculations Assessed at 100%
Lower of: annualised current financial year income (using lowest gross payment on payslips), and annual previous financial year income
ADDITIONAL CONDITIONS
Varying pay on documents		Use the lowest gross pay
If Bonus Income is also being used for serviceability		Refer to Bonus Income (AUD)

Stipend Income (AUD)
Definitions		Stipend: A fixed, regular payment in recognition of services rendered, usually paid at a lower rate than a salaried The income is usually paid to cover a specific cost e.g. payments for food, housing, phone, or motor vehicle costs
DOCUMENTS
Employer's letter-for general use; or Employer's email advice-for general use The document must confirm that the borrower’s or income guarantor 's package includes stipend income
ASSESSMENT / INCOME CACULATION
100%- subject to Credit approval
ADDITIONAL CONDITIONS
Eligibility	Borrower or income guarantor must be a member of the clergy Must be referred to and accepted by Credit
Tax Treatment	Can be considered on an 'un-taxed' basis when that portion of the stipend is currently paid on an untaxed basis and will continue to be paid on an un-taxed basis without condition or subject to change, otherwise it must be treated as taxed income
Commitments or expenses	Any commitment or expense which is related to the stipend, must be included in the serviceability assessment

Temporary Employment (AUD)

Employment is generally short term, of a seasonal nature or has a termination date.

Acceptable temporary employment types and rules:

Employment via an annual contracts* directly with an employer where there is a defined start and end date to their employment period (.

It is acceptable for the annual employment contract to state employment is on a Temporary or Casual basis.

If the borrower or income guarantor meets the above and:

- has access to annual leave and sick leave, assess as per:
  - Dependent Contractor
- does not have access to annual leave and sick leave, assess as per:
  - Casual
Employment via a contract with an employment agency where:
- the employee has a history of continual employment through the temp agency (often referred to as 'temps')
- the employment agency can place the employee on various assignments for any length of time at external businesses.
- the employer remains the employment agency, not the company the employee is on assignment at.
- These employees are to be assessed as per Casual policy

^* Examples of acceptable temporary contractors employed via an annual contract include (but are not limited to), teachers whose payslip or employment contract may state they are employed on a Temporary or Casual basis, but they have a defined start and end date in their contract.

PAYG Salary or Wage - Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions
Definitions	Salary sacrifice / Fringe benefit deduction / Pre-tax deductions on a payslip are deductions from gross income. An employee may choose to have their taxable wage or salary reduced (sacrificed) via a deduction to their gross salary or wage. Some common examples include: Additional superannuation contributions above the Australian Super Guarantee (SG) Repayment of car leases (e.g. novated leases) or other loan repayment, Purchased leave Payment of childcare and school fees If the pre-tax deduction is not required for serviceability, it is acceptable to proceed with the lower income figure with the pre-tax deduction amount excluded. No further investigation is required, however, if it is related to a Commitment and/or Living Expense, ensure it has been reflected in the application. If the pre-tax deduction is required for serviceability, comply with the below
DOCUMENTS
Documents N/A - salary sacrifice details are to be captured via ApplyOnline application input
Deduction type		Can be added back to gross income for servicing:
Superannuation contribution Purchased leave Salary packaging Other purposes not documented below:		After confirming with the customer that: the deduction is voluntary, can be cancelled at any time and received as taxable income; and the customer will cancel the pre-tax deduction if required to meet their existing commitments and the repayments for the loan they have
Novated leases and other commitments		When the related commitment is captured in the loan application and verified as per Commitments policy
ASSESSMENT / INCOME CALCULATION
100% of the deduction added back to base income
ADDITIONAL CONDITIONS
Additional Superannuation contribution		Brokers / assessors must confirm that the contributions are not: Compulsory employee superannuation contributions by the borrower’s or income guarantor’s employer. There may be a description of ‘Comp’ or similar alongside the amount on the payslip, but be aware that this amount may include both compulsory and non-compulsory amounts. Any non-compulsory portion as confirmed by the broker / assessor is eligible. For compulsory employee superannuation contributions deducted Post-Tax, refer to Post-Tax deductions
Commitments or expenses		Any commitment or living expense which is related to the deduction amount, must be included in the serviceability assessment

PAYG Salary or Wage -After tax / post tax deductions

After Tax or Post Tax deductions are deductions from the net salary, i.e. after tax has been applied and deducted.
The post-tax deduction is not to be removed from or added to the base income figure from the payslip.
The deduction must be assessed and entered in the application as per:

Living expense policy, refer specific expense category > expense category table; or
Commitments policy, as per the individual commitment type

2.3 Verifying Supplementary Income

Supplementary income	Annuity (AUD)	Interest Income (AUD)-(other than from own company)	Returns from Self-managed Super Fund (SMSF) (AUD)
	Child Support Payments / Maintenance (AUD)	Private Pension income (AUD)	Social Security Income (AUD)
	Dividend from ASX listed shares (AUD)-(other than from own company)	Rental Income (AUD) Not an NDIS property	Superannuation Income (AUD) -(Retail, Industry, Public sector, or Corporate superannuation fund)
	Fully maintained company car (AUD)	Rental income (AUD) From a NDIS SDA property
	Fringe Benefit income (AUD)	Rental income (AUD) Rent received on a short term basis

Annuity (AUD)
DOCUMENTS
Annuity provider's letter; or Annuity provider's email advice And one of the following: Account transaction listing produced internally from a Westpac Group system showing receipt of payments over a 6 month period, with the credit narrative aligned to the income; or Account statement from other financial institution with proof of receipt of payments for a continuous 6 month period with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively covering receipt of payments over a 6 month period, with the credit narrative aligned to the income. Final transaction on the statement must not be older than 12 months from the Responsible Lending Start Date.
ASSESSMENT / INCOME CALCUALTION
100%
Income to be used in assessment is lower of: • The cycle payment amount detailed on the provider letter or email, or • Average of the last 6 months payments to account (do not tax)
ADDITIONAL CONDITIONS
Eligibility	Must be a guaranteed income for a set period of time, either a lifetime or a fixed term, from monies invested in a superannuation fund or life insurance company. Payments only made annually may be referred to Credit for exception consideration
Tax Treatment	Annuities may be taxed or untaxed

Child Support/Maintenance (AUD)
DOCUMENTS
Government letter; or Child support assessment extract from myGov portal And one of the following: Account transaction listing produced internally from a Westpac Group system with proof of receipt of maintenance payment for a continuous 6 month period, with the credit narrative aligned to the income; or Account statement from other financial institution with proof of receipt of maintenance payment for a continuous 6 month period with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively proving receipt of maintenance payment for a continuous 6 month period, with the credit narrative aligned to the income. Final transaction on the statement must not be older than 12 months from the Responsible Lending Start Date.
ASSESSMENT / INCOME CALCULATION
80%
ADDITIONAL CONDITIONS
Eligibility	May only be considered when received in addition to PAYG or self-employed income
Age of Dependant	Non-mortgaged insured	Mortgage insured
	Maximum age of dependant children is up to but not including 13 years of age at time of application (unless the payment of these benefits can be sustained for the term of the loan).	Maximum age of dependant children is up to and including 11 years of age at time of application (unless the payment of these benefits can be sustained for the term of the loan).

Dividend from ASX listed shares (AUD) - (other than from own company)
DOCUMENTS
Latest Australian tax return, and Australian Taxation Office Notice of Assessment, or If ATO NOA has not issued: Australian Tax Return lodgement extract from myGov Portal OR If the above documents are not available, refer to Credit with: current investment certificate, and account statement evidencing payment over a 6 month period
ASSESSMENT / INCOME CALCULATION
80%
ADDITIONAL CONDITIONS
Eligibility	The source of the dividend must not be from own company. Income source must continue post loan drawn down e.g. funds will not be used towards purchase
Income Reliance	Dividend income must not exceed 50% of total income (refer to Credit for consideration above 50%)
Franking Credits	A Franking credit must not be added to the dividend

Fully maintained company car (AUD)

DOCUMENTS

Employer's letter - for general use;

Employer's email advice - for general use

The document must confirm:

that the borrower’s or income guarantor 's package includes a car fully maintained by the company.

ASSESSMENT / INCOME CALCULATION

100% to a maximum of $5,000 gross per annum

Fringe Benefit income (AUD)
DOCUMENTS
Employer's letter - for general use; or Employer's email advice - for general use The document must confirm: Length & mode of employment Any fringe benefits and the amount which may be changed to gross income Full breakdown of the payments or fringe benefit made (detailing the amounts & type for each) and if the payments or fringe benefits are for personal discretionary use or work purposes only Detail the conditions of each payment or fringe benefit If the payment is taxed or non-taxed If the payment is the payment subject to change (i.e. not ongoing on a regular basis)
ASSESSMENT / INCOME CALCULATION
100% subject to Credit acceptance
ADDITIONAL CONDITIONS
Eligibility	Fringe benefits may be paid in addition to an employee taxable wage / salary, e.g. car, car parking, entertainment, expense reimbursement, loans with no or reduced interest rate, housing, board or living away from home allowance. Some fringe benefits may not be ongoing benefits. If fringe benefit income is to be assessed as income, it must be referred to Credit for acceptance.

Interest Income (AUD) - (other than from own company)
DOCUMENTS
Latest Australian tax return and Australian Taxation Office Notice of Assessment
ASSESSMENT /INCOME CALCULATION
80%
ADDITIONAL CONDITIONS
Eligibility	The source of the interest must not be from own company. Income source must continue post loan drawn down e.g. funds will not be used towards purchase.
I ncome Reliance	Interest income must not exceed 50% of total income (refer to Credit for consideration above 50%)

Private Pension (AUD)
Definitions	A pension paid to a person from monies invested in savings schemes or mutual funds run by insurance companies
DOCUMENTS
Private pension provider's letter; or Private pension provider's email advice And one of the following: Account transaction listing produced internally from a Westpac Group system, showing receipt of payments over a 6 month period, with the credit narrative aligned to the income; or Account statement from other financial institution, showing receipt of payments over a 6 month period, with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively covering receipt of payments over a 6 month period, with the credit narrative aligned to the income. Final transaction on the statement must be no older than 12 months from the Responsible Lending Start Date.
ASSESSMENT / INCOME CALCULATION
100%
Lower of: the letter or email advice from the provider, and average of the last 6 months payments to account (do not tax).
ADDITIONAL CONDITIONS
Eligibility		Income must be able to be sustained for term of the loan, as evidenced by: The provider’s document showing that the remaining term of the payment is equal to or greater than the loan term, or If the providers document does not show the remaining term of the payment: The income calculated multiplied by the term of the loan is less than or equal to the investment / superannuation balance For defined benefits private pension, only apply the above calculation for any portion of superannuation income which is not a defined benefits payment Payments only made annually may be referred to Credit for exception consideration
Tax Treatment		Depending on the borrower’s or income guarantor ’s age and type of income stream, may have one or more of: A taxed component – tax has already been paid by the fund on a portion of the benefit An untaxed component – portion of benefit that is still taxable as tax has not been paid in the fund A tax-free component – portion of benefit that is tax-free

Rental Income (AUD) - Not an NDIS property Rent received on a long term basis
DOCUMENTS
Investment property currently tenanted:	Any of the below may be used to verify rental income, but where more than one of the documents are held, the most recent document adhering to Document Standards policy must be used: Existing rental / lease agreement, or Rental statement from licensed - real estate property manager / agent or letting agent, or Contract of Sale where the property is being purchased subject to an existing tenancy. Note: transaction is being completed at arm's length through an independent Australian based real estate agent (i.e. not private sale), or Account transaction listing produced internally from a Westpac group system, over a 3 month period, with the credit narrative aligned to the income; or Account statement from other financial institution, over a 3 month period, with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively covering a 3 month period, with the credit narrative aligned to the income. Final transaction on the statement must be no older than 12 months from the Responsible Lending Start Date, or Latest Australian tax return and Australian Taxation Office Notice of Assessment (refer specific rental Property statement in the ATO return)
Investment property NOT currently tenanted:	Any of the below may be used to verify rental income, but where more than one of the documents are held, the document with the lowest rental value must be used: Valuation report (no older than 3 months) with rental estimate, or Licensed real estate property manager's / agent's or letting agent letter or email advice
ASSESSMENT / INCOME CALCULATION
*Lowest of applicable assessment rates below, except where a ‘Special Condition’ applies*
Investment property	90%
*Special Conditions* - lowest of applicable assessment rates below
Loan is mortgage insured and is a Rural Residential property	0%
Defence Housing Authority (DHA) rental guarantee	Rent net of management fees (16.5%) - 100% NRAS Head lease discounting
Commercial Property	Property held and rent received by the borrower or income guarantor for a minimum of 12 months	80%
	If above not met	0%
Prestige Property Refer to Loan to Value Ratio (LVR) > LVR by property value	70%
Located in a Concentration Risk postcode Refer to Security Collateral Value > Postcode Categories	60%
ADDITIONAL CONDITIONS
INCOME RELIANCE	For mortgage insured loans: Rental income must not exceed 50% of total income (refer to Credit for consideration above 50%)
NRAS	NRAS property under a Head Lease structure not currently owned or rented: the market rental stated on rental income verification documentation is to be discounted by 25%
Self Employed applicants	Where the application also includes self-employed income refer to: Self Employed Applicants policy > Fast track self-employed assessment; or Self Employed Applicants policy > Rental income - fully verified self-employed assessment
Essential repairs noted on Full Valuation	Where a valuer comments that the property is unsuitable to rent due to repairs being required, and the value of the repairs is within acceptable tolerances, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, and: The valuer has provided an estimated rental amount, subject to the repairs being completed, and The borrower(s) has sufficient funds to complete the repairs, as evident in the borrower’s declared asset position Then The Valuers rental estimate (where acceptable as detailed above), post the repairs being completed, may be included in the Serviceability assessment. Note: Where the Valuer has not provided an estimated cost of the repairs or recommends an independent professional opinion be sought, then rental income cannot be included for that property unless: an estimated cost / quote(s) for the repairs is held, and the borrower(s) has sufficient funds to complete the repairs, as evident in the borrower’s asset position. Where the cost of the repairs exceeds acceptable tolerances, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, the application must be referred to Credit consideration
Property under construction	Where the property under construction is: A security collateral in the new loan application, the verified rental income for that property can be included in the serviceability assessment, or An asset property in the new loan application, the verified rental income for that property may only be included in the serviceability assessment where the full corresponding commitment (i.e. the loan limit once the loan is fully drawn) is: included in the application, and verified to the loan contract or internal WBG system extract or enquiry.

Rental income (AUD) - From a NDIS SDA property Rent received on a long term basis
DOCUMENTS
NDIS SDA Property is not used as security collateral in this loan, and: is currently owned and tenanted			Rental statement from acceptable SDA Registered Provider; and Licensed real estate property manager's / agent's or letting agent letter or email advice with rental estimate based on single residential vacant possession basis
ASSESSMENT / INCOME CALCULATION
*Lowest of applicable assessment rates below*
Investment property	90%
Loan is mortgage insured and is a Rural Residential property	0%
INCOME CALCULATION
NDIS SDA property is NOT used as security collateral for this loan	The lower of: the rental statement income, and the single residential vacant possession rental figure, stated on the Licensed real estate property manager's / agent's or letting agent letter or email advice
ADDITIONAL CONDITIONS
Eligibility		NDIS SDA properties cannot be used as security collateral for consumer mortgage loans. Refer to Loan to Value Ratio (LVR) policy > Acceptable security collateral
INCOME RELIANCE		For mortgage insured loans: Rental income must not exceed 50% of total income (refer to Credit for consideration above 50%)
Self Employed applicants		Where the application also includes self-employed income, and: the NDIS SDA property is currently owned and tenanted refer to: Self Employed Applicants policy > Fast track self-employed assessment; or Self Employed Applicants policy > Rental income - fully verified self-employed assessment
Essential repairs noted on Full Valuation		Where a valuer comments that the property is unsuitable to rent due to repairs being required, and the value of the repairs is within acceptable tolerances, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, and: The valuer has provided an estimated rental amount, subject to the repairs being completed, and The borrower(s) has sufficient funds to complete the repairs, as evident in the borrower’s declared asset position Then The Valuers rental estimate (where acceptable as detailed above), post the repairs being completed, may be included in the Serviceability assessment. Note: Where the Valuer has not provided an estimated cost of the repairs or recommends an independent professional opinion be sought, then rental income cannot be included for that property unless: an estimated cost / quote(s) for the repairs is held, and the borrower(s) has sufficient funds to complete the repairs, as evident in the borrower’s asset position. Where the cost of the repairs exceeds acceptable tolerances, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, the application must be referred to Credit consideration

Rental income (AUD) Rent received on a short term basis
DOCUMENTS
Latest Australian tax return and Australian Taxation Office Notice of Assessment (refer specific rental Property statement in the ATO return)
ASSESSMENT / INCOME CALCULATION
80% except where a ‘Special Condition’ applies
*Special Conditions* - lowest of applicable assessment rates below
Prestige Property Refer to Loan to Value Ratio (LVR) > LVR by property value		70%
Located in a Concentration Risk postcode Refer to Security Collateral Value > Postcode Categories		60%
Loan is mortgage insured, and: Rural Residential property		0%
ADDITIONAL CONDITIONS
Eligibility	Property must be already owned by the borrower or income guarantor or self-employed entity, and currently tenanted / available for rent on a short term rental basis Rent on a short term can be considered from: Standard investment property Serviced apartments, Hotel / Motel or holiday accommodation Student accommodation Self-contained granny flat, only where: it is at owner occupied address, and the portion rented is a fully self-contained separate area of occupancy with a minimum of 1 conventional bedroom (not a studio / partitioned space) with full living facilities including standard kitchen, bathroom facilities and direct independent access
Income reliance	Mortgage insured loans: Rent must not exceed 50% of total income (for consideration greater than 50% refer to Credit).
Self Employed applicants	Where the application also includes self-employed income refer to: Self-Employed Applicants policy > Fast track self-employed assessment; or Self-Employed Applicants policy > Rental income - fully verified self-employed assessment

Returns from Self-managed Super Fund (SMSF) (AUD)
DOCUMENTS
Last 2 years audited SMSF Australian tax returns, and Financial statements including a signed Auditors Statement If: less than 2 years SMSF tax returns, refer to Credit with: interim financials, and accountants' letter or accountants email advice meeting the standards under Self-employed applicants policy > Exceptions to providing 2 years tax returns / financials borrower or income guarantor is self-employed additional documentation may be required as per Self-employed income verification
ASSESSMENT / INCOME CALCUALTION
100%
Use income Stream payments from borrower’s or income guarantor ‘s 'Members information' in SMSF tax returns, not the SMSF income for the entire fund. Where Income stream payments from current year's SMSF tax return is: lower than previous year, then current year's income stream payment is used higher than previous year, then the average of both years income stream payments is used
ADDITIONAL CONDITIONS
Tax Treatment	Returns from SMSF may be taxed or untaxed

Social Security Income (AUD)
DOCUMENTS
Government letter Or For Service pensions (only), either: Account transaction listing produced internally from a Westpac Group system, over a 6 month period, with the credit narrative aligned to the income; or Account statement from other financial institution, over a 6 month period, with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively covering a 6 month period, with the credit narrative aligned to the income. Final transaction on the statement must be no older than 12 months from the Responsible Lending Start Date.
ASSESSMENT / INCOME CALCULATION
100%
ADDITIONAL CONDITIONS
Eligibility	Acceptable sources	Conditions
	Age pension, Department of Veterans' Affairs (service or widow pension), Widow B Pension, Widow's allowance, Disability support pension	These sources may additionally include a "pension supplement' or "pension basic supplement" which is also acceptable income assessed at 100%.
	Family Tax Benefit Part A or B Base	Only acceptable when the borrower or income guarantor will receive payments for at least 5 years from the date of the loan application.
	Family Tax part A base	Only acceptable when the maximum age of dependant children is up to but not including 11 years of age (i.e. is payable for the next 5 years.)
	Family Tax part B base (member of a couple)	Only acceptable when the maximum age of dependant children is up to but not including 8 years of age (i.e. is payable for the next 5 years)
	Family Tax part B base (single parent)	Only acceptable when the maximum age of dependant children is up to but not including 11 years of age (i.e. is payable for the next 5 years)
	Unacceptable sources	Family Tax part A and B supplements Any social security payment that is paid annually Other social security allowances which may be payable (e.g. pharmaceutical and telephone allowances)

Superannuation Income (AUD)
Definitions	A pension paid to a person from monies invested in a Retail, Industry, Public sector, or Corporate superannuation fund
DOCUMENTS
Superannuation fund letter; or Superannuation fund email advice And one of the following: Account transaction listing produced internally from a Westpac Group system, showing receipt of payments over a 6 month period, with the credit narrative aligned to the income, or Account statement from other financial institution, showing receipt of payments over a 6 month period, with the credit narrative aligned to the income, or Account transaction listing from another financial institution and Account statement collectively covering receipt of payments over a 6 month period, with the credit narrative aligned to the income. Final transaction on the statement must be no older than 12 months from the Responsible Lending Start Date
ASSESSMENT / INCOME CALCULATION
100%
Income used is the lower of: the cycle payment amount detailed on the provider letter or email, or average of the last 6 months payments to account (do not tax)
ADDITIONAL CONDITIONS
Eligibility	Income must be able to be sustained for term of the loan, as evidenced by: The provider’s document showing that the remaining term of the payment is equal to or greater than the loan term, or If the providers document does not show the remaining term of the payment: The income calculated multiplied by the term of the loan is less than or equal to the investment / superannuation balance For defined benefits superannuation payment, only apply the above calculation for any portion of superannuation income which is not a defined benefits payment Payments only made annually may be referred to Credit for exception consideration
Tax Treatment	Depending on the borrower’s or income guarantor’s age and type of income stream, may have one or more of: A taxed component – tax has already been paid by the fund on a portion of the benefit An untaxed component – portion of benefit that is still taxable as tax has not been paid in the fund A tax-free component – portion of benefit that is tax-free

2.4 Verifying Self-employed Income

Definitions	A borrower or income guarantor may need to be assessed as self-employed where they earn income or have a loss from a business related to them, which may include: PAYG income and / or Directors fees from own company Distribution of income from a trust They are a sole trader, earning Personal Services (PSI) income or in a partnership borrower or income guarantor is an Individual ATF a trust When undistributed company profits are being used for individual serviceability assessment Dividend received from own company and used for serviceability assessment Independent contractors
Self-employed income (AUD)	Director Fees (AUD) - (from own company)	Fast Track self-employed (AUD)	Partners from selected companies (AUD)
	Dividend (AUD) from own company	Independent contractor (AUD)	Professional sportsperson (AUD)
	Fully verified self-employed (AUD)	Medico assessment (AUD)

Director fees (AUD) - from own company

DOCUMENTS

Same requirement as Fully verified Self-Employed (refer below)

ASSESSMENT

Same as fully verified self-employed

Dividend (AUD) -from own company
DOCUMENTS
Same as Fully verified Self-Employed
ASSESSMENT / INCOME CALCULATION
Same as fully verified self-employed
ADDITIONAL CONDITIONS
Eligibility	Dividend received from own company and used for serviceability assessment, where undistributed company income is not being used for serviceability assessment, including scenarios: Borrower or income guarantor (WBC only) is is a director and a shareholder Borrower or income guarantor (WBC only) is is a Shareholder but not a director of the company Borrower or income guarantor (WBC only) is has < 50% shareholding in the company A Franking credit must not be added to the dividend. A franking credit is unacceptable income Refer to Self-employed Applicants > Applications by income source > Dividend received from own company and used for serviceability calculations (*not* using any undistributed company profit)

Fully verified self-employed
(Non-Fast Track)

2 year average (AUD)
Latest year income (AUD)

DOCUMENTS

For income documentation requirements, refer to Self-employed Applicants policy :

Applications by income source
Self-employed activity has made a loss or it has been identified it cannot service its commitments on its own
Exceptions to providing 2 year tax returns / financials

ASSESSMENT / INCOME CALCULATION

100%

ADDITIONAL CONDITIONS

Refer to Self-employed Applicants policy

Fast Track self-employed (AUD)
DOCUMENTS
Non-mortgage insured		Mortgage insured
Last 2 years personal Australian Taxation Office Notice of Assessment (it is mandatory to hold all pages of the ATO NOA for Fast Track self-employed)		Not an acceptable income verification method
ASSESSMENT / INCOME CALCUALTION
100%
ADDITIONAL CONDITIONS
Eligibility	Refer to Self-employed Applicants > Fast track self-employed assessment for criteria and conditions

Independent contractor (AUD)
Definitions	Persons employed on a commercial contract, with work arrangements consistent with the definition of a self-employed person, will be classified as an independent contractor. An independent contractor is to be assessed as Self-Employed. (May have multiple contracts with different employers.)
DOCUMENTS
Assess in terms of fully verified self-employed
ASSESSMENT / INCOME CALCULATION
100%

Medico Assessment (AUD)
Definitions		Where self-employed and applying under: Medico Sector policy
DOCUMENTS
Non-mortgage insured			Mortgage insured
The last 1 years: Personal Australian Tax Return; and Australian Taxation Office Notice of Assessment (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed); If ATO NOA has not issued: latest Australian Tax Return lodgement extract from myGov Portal AND Where the borrower or income guarantor has earned income from any of the below sources: Partnership, Trust or Company: Australian Tax Return and Financial Statements corresponding to the tax return provided			Not acceptable
ASSESSMENT / INCOME CALCULATION
100%
ADDITIONAL CONDITIONS
Eligibility	Must comply with the relevant ‘Special Packages’ policy: Special Packages – Medico Sector

Partners from selected companies (AUD)
Definitions	For a Partner in one of the below firms: Allens, Binder Dijker Otte – BDO, Clayton Utz, Corrs Chambers Westgarth, Deloitte, Ernst & Young, Gadens, Gilbert & Tobin, Grant Thornton, Herbert Smith Freehills, HWL Ebsworth Lawyers, King & Wood Mallesons, KPMG, McGrath Nicol, Minter Ellison, Norton Rose Fulbright, Pitcher Partners, PKF, PWC, RSM Australia, William Buck
DOCUMENTS
Employer's letter, or Employer's email advice
ASSESSMENT / INCOME CALCULATION
100%

Professional sportsperson (AUD)
Definitions	Applicable to a professional sportsperson who is a: professional athlete (all sports), or professional coach (all sports), or retired athlete still working within the sports or entertainment industry
DOCUMENTS
Where employed greater than 2 financial years: Same requirements as fully verified self-employed
Where employed less than 2 financial years:
For:		Non-mortgage insured	Mortgage insured
Contract Based		Employment contract for professional sportsperson	Same requirement as fully verified self-employed
Performance Based		Latest Australian Tax Return; and Australian Taxation Office Notice of Assessment; or If ATO NOA has not issued: latest Australian Tax Return lodgement extract from myGov Portal AND Latest Business Australian Tax Return and Interim financial including balance sheet from any companies / trusts formed by the borrower or income guarantor AND One of the below documents which must contain an Estimate of the taxable income for current financial year, as well as any requirements listed in Document Standards policy: Accountant's letter, or Accountant's email advice
ASSESSMENT / INCOME CALCULATION
100%
If employed greater than2 financial years, same requirements as fully verified self-employed If employed less than 2 financial years: For contract based: Use Base salary on contract. Any extra income received (endorsements, bonuses, match payments) must be accepted by Credit For performance based: If the current year's total income is lower than previous years, the current year's income is used. If the current year's income is higher than previous years, the average of both years income is used.

2.5 Verifying Foreign Income and / or Foreign Employment

Foreign Income and / or Foreign Employment
Base salary or wage income (AUD) - from Foreign Employment Australian citizen, New Zealand citizen and Permanent resident (Ordinarily resident in or outside Australia) OR Temporary resident (Ordinarily resident in Australia)		Foreign Pension		Foreign Self-Employed Foreign self-employed income is not acceptable and can only be considered by Credit as an exception
Base salary or wage income (Foreign) Australian citizen, New Zealand citizen and Permanent resident: (ordinarily resident in Australia) (ordinarily resident outside Australia)		Foreign Rental Income
Definitions	Applications are to be assessed using this policy, where a borrower, income guarantor (WBC only) or individual assessed under Serviceability Assessment policy > Apportioned household expenses and shared commitments – Spousal same household: is earning income in a foreign currency, or is not working in Australia and its territories, this includes, but is not limited to, applicants employed by an Australian entity, but working outside Australia and its territories, or is employed by a foreign employer which is not registered in Australia, i.e. does not have an Australian Business Number (ABN).
Restrictions	Not available to company and / or trusts No self-employed income can be used in the serviceability assessment Foreign income is not acceptable to be used for Serviceability Assessment > Apportioned shared commitments or Apportioned household expense and shared commitments – Spousal same household policies Applicants who meet the Bank's definition of a non-resident as per Lending to Non-Australian Citizens policy > Non-Resident lending, are unacceptable to the Bank and no lending is permitted. Any applicable LVR restrictions documented under Loan to value ratio (LVR) > Rules to apply > LVR by borrower type and income source and LVR by product features and purpose
Conditions	Standard Condition		Allowable exceptions to Standard Condition
	Where supporting documents are not in English or display a currency other than AUD, refer to Document Standards policy > When supporting documents are not in English or display a currency other than AUD Prior to commencing loan assessment, confirm the applicant is acceptable to the bank as per Lending to Non-Australian Citizens : Visa Matrix: Acceptable Visas Unacceptable Visas Applicant via Resident Type Matrix. Confirm that the income currency and / or foreign employer country of origin is listed on the Acceptable country / currency list, for inclusion of income toward serviceability assessment		N/A
	Confirm foreign employment eligibility where the passport country of issue does not match the country where the applicant is employed. The individual must provide evidence of an appropriate visa which allows them to reside and work within the foreign country, i.e.: A Copy of the applicant’s current passport which shows: The applicant’s current work permit / work visa for the country of employment AND A minimum of 4 months remaining on the work permit / visa at the time of submission of the full application. A Copy of the documentation permitting them to reside in the foreign country, this may be via a stamp or label affixed to the passport or separate card.		Where an applicant is a permanent resident of the country they are employed in, and a work permit / visa is not available, they must provide a copy of their permanent residency documentation for that country. Evidence of permanent residency or work permit / work visa may be either via a stamp / label affixed in the passport or held as a separate card / document. If documentation is unable to be provided, the application is unable to proceed. Applicants with dual citizenship in Australia and the foreign country where they are employed, must provide a copy of both current passports and retain with other supporting documents. For a list of countries who do not permit dual citizenship with Australia please refer to Acceptable country / currency list

Base salary or wage income (AUD) - from Foreign Employment Australian citizen, New Zealand citizen and Permanent resident (Ordinarily resident in or outside Australia) OR Temporary resident (Ordinarily resident in Australia)
Definition	Base income: as per Verifying PAYG Salary Wage income (AUD) > Base income
Documents
Non-mortgage insured			Mortgage insured
1 YTD payslip, covering 2 pay cycles, or Last 2 consecutive payslips AND Account statement covering a minimum of 3 months’ salary credits, with the employer’s name included in the credit narrative, or Latest Australian tax return and Australian taxation office Notice of Assessment			The same as ‘Non – Mortgage insured’, excluding: Mortgage insurance is not available for: New Zealand citizen or Permanent resident where ordinarily resident outside Australia
ASSESSMENT / INCOME CALCULATION
100% base 0% non-base
Where payslip is supported by: 3 months’ salary credits, income used is: Gross base salary from payslip(s), Latest Australian tax return, income used is the lower of: Gross base salary from payslip(s), and Assessable foreign income from personal Australian Tax return
ADDITIONAL CONDITIONS
Eligibility		Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions For consideration of non-base income, refer to Credit with strong supporting mitigants and justification
Varying income on documents		Where: The base income amount varies between payslips, the payslip with the lowest base income must be used Payslip(s) is supported by salary credits, the net salary credit(s) on the account statement must match the net pay amount on the payslip(s)
Foreign income team assessment		Where all income earned is in Australia Dollars (AUD) and credited to an Australian financial institution account, assessment by the foreign income team is not required

Base salary or wage income (Foreign) Australian citizen, New Zealand citizen and Permanent resident (Ordinarily resident in Australia)
Definitions	Base income: as per Verifying PAYG Income - Salary or Wage (AUD) > Base income
DOCUMENTS
Non mortgage insured			Mortgage insured
Last 2 consecutive payslips; or 1 YTD payslip, covering last 2 pay cycles AND Latest Australian tax return and Australian Taxation Office Notice of Assessment and Foreign currency Translation checklist			Mortgage insurance is not available
ASSESSMENT / INCOME CALCULATION
100% base 0% non-base
Income used is the lower of: Gross base salary from payslips, and Assessable foreign income from personal Australian Tax return Exchange rate used is the 'monthly average' rate via http://www.xe.com
ADDITIONAL CONDITIONS
Eligibility		Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions For consideration of non-base income, refer to Credit with strong supporting mitigants and justification
Varying income on documents		Where: The base income amount varies between payslips, then the payslip with the lowest base income must be used

Base salary or wage income (Foreign) Australian citizen, New Zealand citizen and Permanent resident (Ordinarily resident outside Australia)
Definitions	Base income: as per Verifying PAYG Income - Salary or Wage (AUD) > Base income
DOCUMENTS
Non-mortgage insured			Mortgage insured
Last 2 consecutive payslips; or 1 YTD payslip, covering last 2 pay cycles AND Account statement covering a minimum of 3 months consistent salary credits, with the specific employer name included in the credit narrative and Foreign currency Translation checklist			Mortgage insurance is not available
ASSESSMENT / INCOME CALCULATION
100% base 0% non-base
Income used is the lower of: Gross base salary from payslip(s) and Annualised net credits to bank account Exchange rate used is the 'monthly average' rate via http://www.xe.com
ADDITIONAL CONDITIONS
Eligibility		Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions
Varying pay on document(s)		W here: The base income amount varies between payslips, the payslip with the lowest base income must be used Salary credits differ, the lower amount must be used to annualise income

Foreign Pension
Definitions	Foreign currency pension received to foreign bank account
DOCUMENTS
Non-mortgage insured		Mortgage insured
• Government letter, and • Account statement covering a minimum of 3 months consistent pension credits, with credit narratives aligned to the income, and • Foreign currency Translation checklist		Mortgage insurance is not available
ASSESSMENT / INCOME CALCULATION
100%
Income used is the lower of: Annualised gross income from government letter, and Annualised net credits to bank account Exchange rate used is the 'monthly average' rate via http://www.xe.com
ADDITIONAL CONDITIONS
Eligibility	Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions
Varying income on documents	If income payments differ the lower amount is to be used

Foreign rental income
DOCUMENTS
Non mortgage insured		Mortgage insured
Account statement covering a minimum of 6 months consistent rental credits, with credit narratives aligned to the income and Foreign currency Translation checklist		Mortgage insurance is not available
ASSESSMENT / INCOME CALCULATION
100%
Eligibility	Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions Negative gearing is not available
Varying income on documents	If rental payments differ the lower amount is to be used to annualise income

Foreign Self-employed
DOCUMENTS
Non mortgage insured		Mortgage insured
Foreign self-employed income is not acceptable. For Credit consideration as an exception, the below is required: The last 2 years (with most recent year not older than 18 months from date of application): Personal foreign tax returns and Foreign equivalent of Australian Taxation Office Notice of Assessments equivalent; and* Partnership Foreign tax returns, and Trust or company Foreign tax returns and Financial Statements and Foreign currency Translation checklist * Refer to Credit if Notice of Assessment "equivalent" is not issued in the foreign country		Mortgage insurance is not available
ASSESSMENT / INCOME CALCULATION
100% - subject to Credit approval
ADDITIONAL CONDITIONS
Eligibility	Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions Foreign self-employed income is not acceptable and can only be considered by Credit as an exception.

2.6 Income Documents - Standards and Retention

Documents used for income verification must:

Comply with:

Specific rules set out in this policy and
Document Standards policy
Be uploaded into loan application for verification to be undertaken and also held and retained in loan file.

3. Process to follow

Refer to income examples including negative gearing examples for further information.

3.1 Assessing Base Income

Base income

Be aware YTD income figures on a payslip may be provided as YTD total gross earnings (being income prior to tax or other pre-tax deductions) or YTD total taxable earnings (being after pre-tax deductions). Where the payslip provides both figures, use the YTD total gross earnings figure in the employer income calculator

Base Income

Payslips

Also see:

verifying

Add income as Base Salary.
If income documents indicate any pre-tax deductions, refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions

Base income

Direct salary credits

Also see:

Verifying

1. Use the employer income calculator, ensure you complete the fields:

Income verification type > Account Credits
Net pay amount. If salary credits differ the lower amount is to be used to annualise income

2. The calculator will:

Determine base
Provide gross income amount to enter into ApplyOnline

3. Create a PDF copy of the employer income calculator outcome and retain the PDF in the file.
4. If a loan application is referred to Credit a copy of the calculation must be available with the loan documentation for reference.

Salary Sacrifice or
Fringe Benefit deduction or
Pre-Tax deduction

Note: If the salary sacrifice deduction is not required
to be included in gross income for serviceability calculations,
it is acceptable to proceed with the lower income figure.

In these instances you must still include any commitment or living expense which is related to the deduction amount.

Also see:

Verifying

In all cases
Complete the fields within the employer income calculator tool as per the specific income scenario until you reach the "Salary Sacrifice" fields, then refer to below for individual deduction type:

For Additional Superannuation Contributions
Steps

1. Review the payslip and identify the Superannuation Guarantee (SG) contribution amount and the voluntary additional superannuation contribution. If the payslip only shows a single superannuation deduction, then further investigation is required. If it is identified that the superannuation deduction relates solely to the SG amount, then do not proceed further.
Where you have confirmed the deduction is a voluntary superannuation contribution, proceed to step 2.

2. Have the applicant complete the Salary Sacrifice Declaration form. Check the form has been completed in line with requirements as per Rules > Base income > Salary Sacrifice, Fringe Benefit deduction, Pre-tax deductions

Notes: You cannot use the salary sacrificed income for serviceability calculations if the applicant has not:

indicated the deduction is voluntary 9i.e. because it relates to a compuslroy super contribution); and
indicated the deduction can be cancelled at any time and received as taxable income; and
confirmed (where policy requires this declaration) that they would cancel the deduction if required to meet their existing commitments and the repayments for the loan they have requested.

3. In the employer income calculator, ensure you complete the fields:

Pre-tax deductions required for servicing? Yes / No
Pre-tax deduction > Input the actual amount from the payslip. (The amount field must be completed even where the income is not used for serviceability assessment)

Note: The salary sacrifice (pre-tax deduction) amount loaded must be >=$0. All salary sacrifice fields displayed are to be completed. For example, where more than single years documents are obtained complete both the Current Year and Prior Year columns. Where there has been a change to base income, the pre-tax deduction amount prior to the base increase must also be entered. The salary sacrifice amount can vary depending on the applicant's salary sacrifice arrangements at any point in time.

4. If a PAYG Payment Summary or ATO Income Statement is required in the income calculation the amount shown at "Reportable employer superannuation contributions" may be added to the "Gross payments" amount.

5. The calculator will:

Determine base and non-base income
Provide gross income amount to enter into ApplyOnline
Provide an Annual gross income amount to enter into ApplyOnline
Provide an Annual 'Bonus' amount to enter into ApplyOnline

6. Create a PDF copy of the employer income calculator outcome and retain the PDF in the file. Assessment notes are to be completed and provide a clear explanation regarding the income used for serviceability assessment and compliance with this policy.

7. If a loan application is referred to Credit a copy of the calculation must be available with the loan documentation for reference.

For Purchased leave and other purposes
Steps

1. Have the applicant complete the Salary Sacrifice Declaration form. Check the form has been completed in line with requirements as per Rules > Base income > Salary Sacrifice, Fringe Benefit deduction, Pre-Tax deductions

Note: If the applicant has not indicated the deduction is voluntary, can be cancelled at any time and received as taxable income then you can-not use the salary sacrificed income for serviceability calculations.
In addition, (where policy requires this declaration) if the applicant has not confirmed they would cancel the deduction if required to meet their existing commitments and the repayments for the loan they have requested, then you can-not use the salary sacrificed income for serviceability calculations.

2. In the employer income calculator, ensure you complete the fields:

Pre-tax deductions required for servicing? Yes / No
Pre-tax deduction > Input the actual amount from the payslip. (The amount field must be completed even where the income is not used for serviceability assessment)

Determine base and non-base income
Provide gross income amount to enter into ApplyOnline
Provide an Annual gross income amount to enter into ApplyOnline
Provide an Annual 'Bonus' amount to enter into ApplyOnline

4. Create a PDF copy of the employer income calculator outcome and retain the PDF in the file. ApplyOnline notes are to be completed and provide a clear explanation regarding the income used for serviceability assessment and compliance with this policy.

5. If a loan application is referred to Credit a copy of the calculation must be available with the loan documentation for reference.

6. Any corresponding debt / commitment that relates to the salary sacrifice amount must be included in ApplyOnline

7. For car lease payments only the finance portion of the car lease is to be included as an outgo in ApplyOnline (i.e. the car running costs are to be included the declared Living Expenses and do not need to be included as an outgo).

Note:

Often a novated lease may not be cancelled and taken as an increase in gross taxable income due to the potential financial implications to the customer.
Salary sacrifice may be linked to an expense. Ensure the expense is included in customer declared expenses where appropriate e.g. transport in customer declared expense, or car loan repayments in liabilities refer Living expenses.

3.2 Assessing Base plus Non-Base income

Base plus Non-Base income Be aware YTD income figures on a payslip may be provided as YTD total gross earnings (being income prior to tax or other pre-tax deductions) or YTD total taxable earnings (being after pre-tax deductions). Where the payslip provides both figures, use the YTD total gross earnings figure in the employer income calculator Always use the employer income calculator and retain a copy of the calculations with other income documentation Within the employer income calculator Base income will display as the selected pay frequency, whereas the non-base/bonus income will be displayed as an Annual figure The steps herein are provided for reference purposes.
#1 Base plus non-base income, YTD payslip or payslip and ATO YTD income statement covering a minimum of 3 months Also see: Verifying	Non-Base income = YTD annualised less annualised base income. Bonus income, both already received and projected to end of current financial year will be removed prior to annualisation of YTD income and assessed at 80%. 1. Use the employer income calculator 2. This step to be completed in all cases. Ask the applicant if the YTD payslip includes any gross Bonus payments. In ApplyOnline assessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the employer income calculator. The calculator will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under 'Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter intoApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF copy of the employer income calculator outcome and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference.
#2 Base plus non-base income, payslip covering a minimum of 3 months and base income increased in the current financial year Also see: Verifying	Non-Base income = YTD gross income less YTD base income (determined by calculating the lower base over the number of pay cycles at the lower base and higher base over the number of pay cycles at the higher base), and then annualised. Bonus income, both already received and projected to end of current financial year will be removed prior to annualisation of YTD income and assessed at 80%. 1. Use the employer income calculator, ensure you complete the fields: Has base income increased? > Yes Base increase type > Increase in current FY 2. This step to be completed in all cases. Ask the applicant if the YTD payslip includes any gross Bonus payments. In ApplyOnline assessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the income verification tool. The tool will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#3 Base plus non-base income, payslip does not cover 3 months^ ^Payslip does not cover 3 months refers to pay dates between 1 Jul and 29 Sep inclusive Also see: Verifying	Where current year annualised income is > prior year total gross income then: Non-Base income = Total Gross Income (i.e. prior year PAYG gross income plus current year Gross YTD income), divided by the number of pay cycles covered by both the current and prior income documents, multiplied by the number of pay cycles in the year (to return to an annual figure), less the current annualised base income. Bonus income, both already received and projected to end of current financial year will be removed prior to annualisation of YTD income and assessed at 80%. Note: Where current year annualised income is < than prior year total gross income, then non-base income is the lower of current year annualised income less current annualised base income or prior year total gross income less current annualised base income. 1. Use the employer income calculator tool 2. This step to be completed in all cases. Ask the applicant if the YTD payslip includes any gross Bonus payments. In ApplyOnline assessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the income verification tool. The tool will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#4 Base plus Non Base Income, Non-YTD Payslip Also see: Verifying	Non-Base income = Lowest of, a) payslip with lowest gross annualised or b) previous years income, then less annualised base income. Bonus income both already received and projected to end of current financial year removed prior to annualisation of current financial years income and assessed at 80%. 1. Use the employer income calculator, ensure you complete the fields: Do you have a YTD income amount? > No 2. This step to be completed in all cases. If the customer advises that either of the payslips include a bonus payment or either of the payslips provided display a bonus payment, exclude the amount of the gross Bonus payment from the 'total gross pay' fields to be completed for payslip 1 and / or payslip 2. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#5 Base plus non-base income, payslip does not cover 3 months^ and Base income increased in prior financial year ^Payslip does not cover 3 months refers to pay dates between 1 Jul and 29 Sep inclusive Also see: Verifying	Where current year annualised income is > than prior year total gross income, then: Non-Base income = Prior year PAYG gross income less prior year annualised base income¹ plus current year Gross YTD income less YTD base income², divided by the number of pay cycles covered by both the current and prior income documents, multiplied by the number of pay cycles in the year (to return to an annual figure). Bonus income, both already received and projected to end of current financial year will be removed prior to annualisation of YTD income and assessed at 80%. Notes: ¹Prior year annualised base income = the lower base multiplied by the number of pay cycles in the prior year at the lower base plus the higher base multiplied by the number of pay cycles in the prior year at the higher base ²YTD base income = the higher base multiplied by the number of pay cycles that have elapsed in the current year Where current year annualised income is < prior year total gross income, then non-base income is the lower of current year annualised income less current annualised base income or prior year total gross income less current annualised base income 1. Use the employer income calculator, ensure you complete the fields: Is non-base income included? > Yes Has base income increased? > Yes Base income increase type > Increase in prior FY 2. This step to be completed in all cases. Ask the applicant if either the YTD payslip (current year) or final YTD⁵ payslip (prior year) / ATO income statements YTD (current year) or tax ready (prior year) includes any gross Bonus payments. In ApplyOnline assessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the employer income calculator. The tool will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#6 Base plus non-base income, payslip does not cover 3 months^ and Base income increased 1 July ^Payslip does not cover 3 months refers to pay dates between 1 Jul and 29 Sep inclusive Also see: Verifying	Where current year annualised income is > than prior year total gross income, then: Non-Base income = Prior year PAYG gross income less prior year annualised base income¹ plus current year Gross YTD income less YTD base income², divided by the number of pay cycles covered by both the current and prior income documents, multiplied by the number of pay cycles in the year (to return to an annual figure). Bonus income, both already received and projected to end of current financial year will be removed prior to annualisation of YTD income and assessed at 80%. Notes: ¹Prior year annualised base income = the lower base multiplied by the number of pay cycles in the prior year (from either the first day of the financial year or employment start date) ²YTD base income = the higher base multiplied by the number of pay cycles that have elapsed in the current year Where current year annualised income is < prior year total gross income, then non-base income is the lower of current year annualised income less current annualised base income or prior year total gross income less current annualised base income 1. Use the employer income calculator, ensure you complete the fields: Is non-base income included? > Yes Has base income increased? > Yes Base income increase type > Increase from 1^st July 2. This step to be completed in all cases. Ask the applicant if either the YTD payslip / ATO income statements (YTD or tax ready) includes any gross Bonus payments. In ApplyOnline assessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the employer income calculator. The tool will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline. Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#7 Base plus non-base income, payslip does not cover 3 months^ and Base income increased between 2 Jul to 29 Sep inclusive ^Payslip does not cover 3 months refers to pay dates between 1 Jul and 30 Sep inclusive Also see: Verifying	Where current year annualised income is > than prior year total gross income, then: Non-Base income = Prior year PAYG gross income less prior year annualised base income plus current year Gross YTD income less YTD base income¹, divided by the number of pay cycles covered by both the current and prior income documents, multiplied by the number of pay cycles in the year (to return to an annual figure). Bonus income, both already received and projected to end of current financial year will be removed prior to annualisation of YTD income and assessed at 80%. Notes: ¹YTD base income = the lower base pay multiplied by the number of pay cycles in the current year on the lower base plus the higher base pay multiplied by the number of pay cycles in the current year on the higher base Where current year annualised income is < prior year total gross income, then non-base income is the lower of current year annualised income less current annualised base income or prior year total gross income less current annualised base income 1. Use the employer income calculator, ensure you complete the fields: Is non-base income included? > Yes Has base income increased? > Yes Base income increase type > Increase in transition 2. This step to be completed in all cases. Ask the applicant if either the YTD payslip / ATO income statements (YTD or tax ready) includes any gross Bonus payments. In ApplyOnlineassessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the income verification tool. The tool will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#8 Projected bonus income Also See: Verifying	Calculate the maximum projected Bonus income permitted for serviceability calculations Note: The below process steps are optional and should only be used where projected Bonus income will be used for serviceability calculations. The steps can accommodate a scenario where the applicant has both a projected Bonus amount and the YTD income also includes Bonus already received. Steps 1. Ask the applicant if they will receive a Bonus prior to the end of the current financial year (projected Bonus) and where the response is 'yes', enter the declared amount into the annualisation calculator in the current year column, projected bonus field. 2. Obtain the required income documents as per Verifying income > Projected Bonus income (including the prior year payslip(s) (historical) identifying each Bonus amount the applicant previously received). Check that the projected bonus payment cycle is expected between the date of the application and the end of the current financial year to support the use of the projected bonus. 3. Where YTD payslip does not cover a minimum of 3 months, or non-YTD payslips are held - Using the prior year payslips (historical) obtained at step 2, enter the total historical bonus amount in the Bonus already received > Prior year column. Or 3. Where YTD payslip is covering a minimum of 3 months held - From the Group 2 document, enter the previous year annual income 4. The employer income calculator will determine if any of the projected bonus can be used for serviceability assessment. 5. Where the employer income calculator confirms projected bonus (part or full) can be included for serviceability assessment. Enter the amount as displayed in the tool 'Annual bonus' field into ApplyOnline 6. Retain the employer income calculator as a record of your calculations and retain all other income documentation.

3.3 Assessing Casual income or employment

Casual Income or employment Be aware YTD income figures on a payslip may be provided as YTD total gross earnings (being income prior to tax or other pre-tax deductions) or YTD total taxable earnings (being after pre-tax deductions). Where the payslip provides both figures, use the YTD total gross earnings figure in the Income Annualisation Calculator. Always use the employer income calculator and retain a PDF copy of the calculations with other income documentation Employer income calculator will annualise income over a 48 week period (i.e. allowing 2 weeks leave and 2 weeks sick leave annually). In some scenarios e.g. casual teachers or other school staff, income should be annualised over less than a 48 week period, i.e. over 40 weeks. Ensure correct "weeks to annualise" is selected in the calculator. refer income example
#1 Payslip with YTD shown and covers a minimum 3 months of the current financial year Also see: Verifying	For Mortgage insured and Non-Mortgage insured loans: Steps 1. Use the employer income calculator, ensure you complete the fields: Employment basis > Casual Income verification type > YTD Payslip 2. For casual teachers and other school staff change weeks to annualise to '40'. (For other employment types leave as '48) 3. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 4. The calculator will: Provide a Gross Annual Income amount to enter into ApplyOnline 5. Create a PDF of the Casual Income calculation and retain the PDF in the file. 6. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference.

#2 Payslip not covering a minimum 3 months of the current financial year or payslip with no-YTD shown Also see: Verifying	Steps 1. Use the employer income calculator, ensure you complete the fields: Employment basis > Casual Income verification type enter either > No YTD payslip or YTD payslip 2. For casual teachers and other school staff change weeks to annualise to '40'. (For other employment types leave as '48) 3. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 4. The calculator will: Determine lower of current or historical income Provide a Gross Annual Income amount to enter into the OBP field ‘Gross Annual Income’ 5. Create a PDF of the Casual Income calculation and retain the PDF in the file. 6. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
#3 Direct Salary Credits Also see: Verifying	Warning: The process steps are the same for Mortgage Insured and Non-mortgage insured applications, however the documents used for verification are different. Ensure you have obtained the correct documentation for the application type (refer Verifying > Casual Income or employment > Direct salary credits 1. Use the employer income calculator, ensure you complete the fields: Employment basis > Casual Income verification type > Account Credits 2. For casual teachers and other school staff change weeks to annualise to '40'. (For other employment types leave as '48) 3. The calculator will: identify the lowest 'deposit' and calculate an annualised net income figure convert the net annualised income figure to a gross annualised income figure (note: this is not displayed) Compare the annualised grossed up 'deposit' figure (current income) with the annual income from the Group 2 document (historical income) Provide the lowest of current or historical income as a Gross Annual Income amount to enter into ApplyOnline 4. Create a PDF of the Casual Income calculation and retain the PDF in the file. 5. If a loan application is referred to Credit a copy of the Casual Income Calculation must be available with the loan documentation for reference.

3.4 Assessing Rental Income

Rental Income
Rental Income (in AUD) not from NDIS SDA property Rent received on a long term basis Also see: Verifying	Rental income figure is as per Documents Add income as Rental Income Enter the amount into the field 'Gross Amount' and select the 'Frequency' Enter the Ownership % Note: Discrepancy between verification sources where more than one verification source is held, Brokers must provide commentary within ApplyOnline notes/comments to cover and address. Enter the gross rental income and the relevant shadings will apply automatically when serviceability is calculated.
Rental Income from NDIS SDA property Rent received on a long term basis Also see: Verifying	Same as above Rental Income and use rental figure as per Documents.

3.5 Assessing Miscellaneous salary or wage income

Miscellaneous Salary or Wage Be aware YTD income figures on a payslip may be provided as YTD total gross earnings (being income prior to tax or other pre-tax deductions) or YTD total taxable earnings (being after pre-tax deductions). Where the payslip provides both figures, use the YTD total gross earnings figure in the employer income calculator Always use the employer income calculator and retain a copy of the calculations with other income documentation Within the employer income calculator Base income will display as the selected pay frequency, whereas the non-base/bonus income will be displayed as an Annual figure
Emergency Services employee Also see: Verifying	Note: The use of the Emergency Services policy is optional. Brokers can still choose to process emergency services employees as standard PAYG. 1. Use the employer income calculator, ensure you complete the fields: Income verification type > Emergency Services 2. This step to be completed in all cases. Ask the applicant if the YTD payslip includes any gross Bonus payments. In ApplyOnlineassessment notes record the amount of the payment as stated by the applicant. (Verbal enquiry is acceptable and no validation of the applicant's response is required). If the customer advises the YTD income DOES include Bonus payments already received (from step 2) or the payslip provided shows a bonus payment, enter the bonus payment into the income annualisation calculator. The calculator will deduct this amount from the Gross YTD income figure (from either the YTD payslip or ATO YTD Income Statement) prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer to additional steps listed under 'Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the PAYG YTD calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the employer income calculator must be available with the loan documentation for reference
Family employee (i.e. not part owner of the business. Part owner of business to be assessed as self-employed) Also see: Verifying	Family employee (permanent or casual) Confirm applicant not owner or part owner of the business by checking Credit Bureau for directorship or if registered business name ABN search ref Self-employed Applicants policy > Process to follow > How to process a loan application with self-employed applicant(S) (refer to heading Completing business name or company searches).
	To calculate base plus non-base income for serviceability assessment (including where Bonus income received or Bonus income received but is not required for serviceability) - refer to Steps 1 - 9 Non-Base income = Lowest of, a) payslip with lowest gross annualised or b) previous years income, then less annualised base income. Bonus income both already received and projected to end of current financial year removed prior to annualisation of current financial years income and assessed at 80%. 1. Use the employer income calculator, ensure you complete the fields: Income verification type > Family employee 2. This step to be completed in all cases If either of the payslips display a bonus payment, enter the amount in the Bonus income > bonus already received field. The calculator will deduct this amount from the Gross income figure prior to annualisation. 3. If projected Bonus income (or combination of projected and already received Bonus) is required for serviceability, refer additional steps listed under ' Calculate the maximum projected Bonus income permitted for serviceability calculations' 4. If income documents indicate any pre-tax deductions refer to Process > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 5. The calculator will: Determine base and non-base income Provide gross income amount to enter into ApplyOnline Provide an Annual gross income amount to enter into ApplyOnline Provide an Annual 'Bonus' amount to enter into ApplyOnline 6. Create a PDF of the Family Employee Income calculation and retain the PDF in the file. 7. If a loan application is referred to Credit a copy of the Family Employee Income Calculation must be available with the loan documentation for reference.	Casually employed family employees To calculate income for serviceability assessment - refer to steps 1 - 9 Steps 1.Enter the following information into the employer income calculator: Employment basis > Casual Income verification type > Family employee Pay cycle as per payslip, select either > Weekly / Fortnightly / Monthly 2. Weeks to annualise leave as ’48’ (For casual teachers and other school staff change weeks to annualise to ‘40’). 3. From the current (most recent) payslip enter the following into PAYSLIP 1 column: gross pay (as per pay cycle) 4. From older of the two payslips, enter the following into PAYSLIP 2 column: gross pay (as per pay cycle) 5. If income documents indicate any pre-tax deductions refer to Process > Assessing supplementary or additional income > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions 6. From the Group 2 document, enter the previous year annual income 7. The calculator will: Identify the lowest payslip and calculate an annualised income figure Compare the annualised income figure from the lowest payslip (current income) with the annual income from the Group 2 document (historical income) display the lowest of current or historical income for use in serviceability calculations 8. Create a PDF of the Family Employee Income calculation and retain the PDF in the file. 9. If a loan application is referred to Credit a copy of the Family Employee Income Calculation must be available with the loan documentation for reference.
Stipend Income Also see: Verifying	Add income as Stipend (Un-taxed) or Stipend (Taxed)

3.6 Assessing Supplementary income

Supplementary income
Annuity income Also see: Verifying	Add income as Annuity, superannuation, or private pension. Enter the amount into the field 'Gross Amount' and select the 'Frequency'. Select how the income is taxed in the Additional Details screen. How to calculate: Use the lower of the letter or email advice from the provider or average of the last 6 months payments to account (do not tax). Calculate income can be sustained for term of the loan by either: The Annuity providers letter or email advice shows the remaining term of the payment as the same or longer than the term of the loan or The income calculated above multiplied by the term of the loan must be less than or equal to the annuity fund balance* *Note: Not required for lifetime annuity
Child Support Payments / Maintenance Also see: Verifying	Add income as Maintenance / Child Support Payments.
Dividend from ASX listed shares (other than from own company) Also see: Verifying or Interest Income (other than from own company) Also see: Verifying	Add income as Interest Income or Dividend from ASX listed shares (other than from own company).
Fully Maintained Company Car Also see: Verifying	Add income as Fully Maintained Company Car Enter $5k into the field 'Gross Amount' and select the 'Yearly’ Frequency'.
Fringe Benefits Also see: Verifying	Steps 1. if only the fully maintained car is being accepted then treat as "Fully maintained Company Car" in the row above. 2. If additional fringe benefits items are required to be considered for serviceability then complete all of the steps below. Note fringe benefits are only usually identified from employers letter or email advice or PAYG Payment Summary and do not usually appear on a payslip. 3. From the employer's letter or email advice, identify the amount that the employer has advised may be converted from a fringe benefit to gross taxable income. 4. Add the amounts from step 3 as a separate income type of Fringe Benefit 6. Any corresponding debt / commitment that relates to a fringe benefit must be included in ApplyOnline (e.g. low or no interest loan). 7. Refer application plus supporting comments, income calculation and documentation to Credit / CAL holder for acceptance.
Private pension income Also see: Verifying	Add income as Annuity, superannuation, or private pension. How to calculate: Calculate income = Use the lower of the letter or email advice from the provider or average of the last 6 months payments to account (do not tax). Calculate income can be sustained for term of the loan by either: The Private pension providers letter or email advice shows the remaining term of the payment as the same or longer than the term of the loan or The income calculated above multiplied by the term of the loan must be less than or equal to the investment / superannuation balance* *Note: Not required for defined benefits private pension If the borrower receives a defined benefits private pension payment (i.e. payment is not based on the superannuation balance) then only use the above calculation for any portion of superannuation income which is not a defined benefits payment.
Returns from Self-Managed Super Fund (SMSF) Also see: Verifying	How to Calculate: source the current and previous year's gross returns from Self-Managed Super Fund (SMSF) and perform the calculation below. Repeat for the net income if applicable. Compare current year and prior year Income Stream payments from SMSF return: If the current year's returns from Self-Managed Super Fund (SMSF) are lower than previous years then = the current year's income is used. If the current year's returns from Self-Managed Super Fund (SMSF) are higher than previous years then = the average of both years income is used. Note: Less than 2 years SMSF to be referred to Credit with interim financials and accountant's letter or email advice. If applicants are self-employed additional document may be required in terms of self-employed income verification. Add income as Returns from Self-Managed Super Fund (SMSF) in ApplyOnline
Superannuation income (Retail, Industry, Public sector, or Corporate superannuation fund) Also see: Verifying	Add income as Annuity, superannuation, or private pension in ApplyOnline. How to calculate: Use the lower of the letter or email advice from the provider or average of the last 6 months payments to account (do not tax). Demonstrate income can be sustained for term of the loan by either: The Superannuation providers letter or email advice shows the remaining term of the payment as the same or longer than the term of the loan or The income calculated above, multiplied by the term of the loan must be less than or equal to the investment / superannuation balance* *Note: If the borrower receives a defined benefits superannuation payment (i.e. payment is not based on the superannuation balance) then only use the above calculation for any portion of superannuation income which is not a defined benefits payment.
Social Security Income Also see: Verifying	Add income as the relevant Social Security income which is being verified: Age Pension Department of Veterans' Affairs (service or widow pension) Disability Support Pension Family Tax Benefit Part A Family Tax Benefit Part B Widow B pension Widow's Allowance

3.7 Assessing Self-employed Income

Self-Employed Income
Director fees (from own company)	See section Fully verified self-employed policy below.
Fully verified Self-Employed Medico Assessment (Non-fast track) (including independent contractor) (Non-LMI only) Also see: Verifying	When 1 Years Financials is permitted by policy i.e. Medico . Refer to Self-Employed Applicants
Fully verified Self-Employed 2 year average Or Latest year (including independent contractor) Also see: Verifying	Refer to Self-Employed Applicants
Fast Track self-employed (Non-LMI Only) Also see: Verifying	Refer to Self Employed Applicants
Professional sportsperson Also see: Verifying	Same requirement as Credit Processes - Fully verified self-employed - 2 year average (Non-fast track). Add income as Professional Sportspersons. If the current year's total income is lower than previous years then = the current year's income is used. If the current year's income is higher than previous years then = the average of both years income is used. Note: If copy of current contract is used, enter as Base salary. Any extra income received (endorsements, bonuses, match payments) are to be entered as Unacceptable Income (assessed at 0%) with acceptance by Credit only.

3.8 Assessing Foreign income

3.8.1 Foreign income credit processes

This section is to read in conjunction with Verifying Foreign Income , Foreign income sources and conditions and Assessing income document standards .

Income Source	Credit Processes
Foreign income PAYG (ordinarily resident in Australia) Foreign income must be listed on the Acceptable country and currency list to be acceptable. Also see: Verifying	To calculate foreign income ensure a completed Foreign currency translation checklist is held and complete Steps 1 to 4 below: Step 1. Calculate income from 2 consecutive payslips or YTD pay slip (gross base salary only) Convert foreign total to AUD$ Step 2. Calculate income from personal Australian tax return Convert foreign total to AUD$ (as return is in AUD$ accept the AUD$ amount in the tax return) Step 3. Accept the lower of calculation at Step 1 or 2. Compare the AUD$ amount calculated in 1. above to the AUD$ amount calculated in 2. above and accept the lowest value as the amount to be used as income. Step 4. Calculated AUD$ amount shown in green highlighted cell in the Foreign currency translation checklist , is to be entered as Foreign Currency Income type. Note: Only base income is acceptable. Any income outside of base income must be referred to Credit for acceptance. Exchange rate to be used is the 'monthly average' rate via https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/cb/fx-monthly-averages.pdf . If no rate is available from the Westpac site above use http://www.xe.com/ . Where calculators are used, generate a PDF copy of the calculation and retain in the file.
Foreign income PAYG (ordinarily resident outside Australia) Foreign income must be listed on the Acceptable country and currency list to be acceptable. Also see: Verifying	To calculate foreign income ensure a completed Foreign currency translation checklist is held and complete Steps 1 to 4 below: Step 1. Calculate income from 2 consecutive payslips or YTD pay slip (gross base salary only) Convert foreign total to AUD$ Step 2. Calculate income from credits to bank account (annualised net amount to account) Convert foreign total to AUD$ (ie do not tax) = AUD$ Step 3. Accept the lower of calculation at Step 1 or 2 Compare the AUD$ amount calculated in 1. above to the AUD$ amount calculated in 2. above and accept the lowest value as the amount to be used as income. Step 4. Calculated AUD$ amount shown in green highlighted cell in the Foreign currency translation checklist , is to be entered as Foreign Currency Income type. Note: If two salary credits differ the lower amount is to be used to annualise income. Only base income is acceptable. Any income outside of base income must be referred to Credit for acceptance. Exchange rate to be used is the 'monthly average' rate via https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/cb/fx-monthly-averages.pdf . If no rate is available from the Westpac site above use http://www.xe.com Where calculators are used, generate a PDF copy of the calculation and retain in the file. Where an applicant has foreign income and employment and they do not meet the definition of a non-resident, evidence of a work permit/work visa is to be obtained from the customer to confirm they have the ability to work and reside within the foreign country. Refer to Lending to Non-Australian Citizens > Rules you must apply > Non-Residents Lending
Foreign Pension Foreign income must be listed on the Acceptable country and currency list to be acceptable. Also see: Verifying	To calculate foreign income ensure a completed Foreign currency translation checklist is held and complete Steps 1 to 4 below: Step 1. Calculate income from letter from the relevant government department (annualised gross amount) Convert foreign total Step 2. Calculate income from credits to bank account ((annualised net amount to account) Convert foreign total to AUD$ Step 3. Accept the lower of calculation at Step 1 or 2. Compare the AUD$ amount calculated in 1. above to the AUD$ amount calculated in 2. above and accept the lowest value as the amount to be used as income. Step 4. Calculated AUD$ amount shown in green highlighted cell in the Foreign currency translation checklist , is to be entered as Pension Foreign Currency Income Note: If the income amount varies between government department letter or credits to account, the lowest value on letter or credits to account is to be accepted in the Translations Checklist calculation. Exchange rate to be used is the 'monthly average' rate via https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/cb/fx-monthly-averages.pdf . If no rate is available from the Westpac site above use http://www.xe.com/ .
Rental Income (in foreign currency) Also see: Verifying	To calculate foreign income ensure a completed Foreign currency translation checklist is held. The Foreign currency translation checklist will: Convert foreign total to AUD using the latest 'Monthly average exchange rate', or 'xe.com' if no rate listed Calculate AUD$ amount shown in green highlighted cell in the Foreign currency translation checklist . This is then to be entered as rental income with Foreign currency income flag Note: If two rental payments differ the lower amount is to be used to annualise income Negative gearing is not available Exchange rate to be used is the 'monthly average' rate via https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/cb/fx-monthly-averages.pdf. If no rate is available from the Westpac site above use http://www.xe.com/ Where calculators are used, generate a PDF copy of the calculation and retain in the file.
Foreign Self-Employed Foreign self-employed income is not acceptable and can only be considered by Credit as an exception Foreign income must be listed on the Acceptable country and currency list to be acceptable. Also see: Verifying	To calculate foreign income ensure a completed Foreign currency translation checklist is held Step 1. Using two years financials Step 2. Convert foreign total to AUD using the latest 'Monthly average exchange rate', or 'xe.com' if no rate listed. If the current year's total income is lower than previous years then = the current year's income is used If the current year's income is higher than previous years then = the average of both years income is used Also refer to Self Employed Income Note: Exchange rate to be used is the 'monthly average' rate via https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/cb/fx-monthly-averages.pdf . If no rate is available from the Westpac site above use http://www.xe.com/ Note: Where an applicant has foreign income and employment and they do not meet the definition of a non-resident, evidence of a work permit/work visa is to be obtained from the customer to confirm they have the ability to work and reside within the foreign country. Refer to Lending to Non-Australian Citizens > Rules you must apply > Non-Residents Lending Note: Self-employed income does not require verification if not required to meet serviceability. However if an application is assessed by Credit, Credit may require full self-employed income verification.

3.8.2 Loan applications and approval where the applicant is earning foreign income

Loan applications

No lending is permitted where any applicant is considered to be a non-resident (refer to definition as per Lending to Non-Australian Citizens > Rules you must apply > Non-Residents Lending), the following process is provided for applicants earning foreign income:

Home Loan Application Form to be completed and signed by applicant/s and any guarantor/s
Complete income assessment and verification as per preceding foreign income policy and Verifying Income policy, noting:
- Where the passport country of issue does not match the country where the applicant is employed, evidence is to be supplied to show the applicant is able to reside and work within the foreign country
Apply Valuation policy to determine and order the appropriate valuation type, refer to Security Collateral Value
Broker to include detailed notes in ApplyOnline
Broker to confirm the customer has the funds to complete the transaction
Complete the relevant section of the Translation Checklist
Copies of documents are to be retained in the loan file
Customer's full overseas residential and mailing addresses, email and telephone numbers are to be detailed on the loan application and in ApplyOnline
Undertake a servicing assessment as per Serviceability Assessment policy
Tax Deductions relating to Australian investment properties or Negative gearing benefits are:
- permitted where the applicant has Australian Residency / Citizenship
Satisfactory Bureau Check
Currency must be on the approved list as per Acceptable country and currency list .

Approval

Mortgage insurance is not available where the applicant earns foreign income.
Applicants who are Non-residents of Australia are unacceptable to the bank
Any documents used to complete assessment and issue Formal Approval are to be imaged.

4. Frequently asked questions

4.1 Foreign income and employment - FAQs

Question	Answer
My applicant is an Australian Citizen living and working in the UK, but they don't have dual citizenship, do I need to ask them for their work visa?	Yes, you need to confirm they are legally able to work in the UK before proceeding with the application.
My applicant has recently become an Australian Citizen, previously they had a Chinese passport, but for this application they have provided me with a copy of their Australian passport. Because they were previously a Chinese citizen, do I still need to get a work permit if they are now living and working in China?	As China does not permit dual citizenship with Australia, yes, the applicant will need to provide evidence of their work permit before proceeding with the application.
My applicant is not a resident of Australia, they live and work in China and have a Chinese passport, do I need a work permit?	No, as the applicant is living and working within the same country that they have citizenship with, they will not require a work permit. However, this applicant would meet the non-resident definition and is not an acceptable applicant type.
My applicant has provided me with a copy of their Indian passport, they have also given me a copy of their Australian 190 visa, but they are currently living and working in Dubai. What do I need to do?	This applicant's income does not comply with the visa matrix requirements, 190 visa type must earn AUD. If the 190 visa is ignored, then this applicant is a non-resident of Australia. In both scenarios the applicant is unacceptable to the bank and no lending permitted.

4.2 Salary Sacrifice - FAQs

Question	Answer
The narratives on the payslips show 'voluntary superannuation contribution' or non-SG contribution - why do I still need to get the customer to complete the salary sacrifice deduction declaration form.	The salary sacrifice deduction declaration form helps us have a conversation with our customer and record the outcome of those discussions. In some cases the applicant's may be unwilling or unable to cancel the deductions, it is important that we do not make an assumption that the amount of the deduction is going to be available to meet this new loan commitment. For example: 1. The voluntary salary sacrifice deduction on the payslip is being used by the applicant towards a Self-Managed Superannuation Fund Home Loan. Because of the shortfall between rent received on the investment property and the SMSF Home loan repayment, the applicant is unable to cancel the deduction. 2. The applicant's employer pays an additional superannuation contribution above SG where the employee makes a voluntary contribution. If the employee cancels the voluntary contribution, then they will lose the benefit of the above SG employer contribution. The applicant is unwilling to cancel the deduction as they will suffer a long term financial impact. 3. The applicant has previously had a marital financial settlement. So they can rebuild their superannuation they are making voluntary contributions. As they are planning for their retirement, they are unwilling to cancel the voluntary contribution amount.
When don't I need to get the salary sacrifice deduction declaration form	If the amount of the salary sacrifice deduction is not required for serviceability assessment, then you do not need a salary sacrifice deduction declaration form. Your loan serviceability assessment will be based on the lower income figure. The deduction is an after-tax deduction. While you may need to include the deduction as a commitment or living expense, it is not reducing the customer's taxable income and no salary sacrifice declaration form is required.
Why would my customer not be able to cancel a deduction for purchased leave?	The applicant may need to contact their employer to check under what basis they are able to cancel the deduction. For instance if the applicant has already taken the leave, repayment amount may be spread over the remaining year and might be unable to cancel the deduction.
Why can't my customer cancel their novated lease deduction?	Early cancellation of the novated lease may result in negative tax implications for the customer. They need to investigate with both their employer and seek taxation advice to make a fully informed decision about any financial implications of cancelling the novated lease.
If I don't use the salary sacrifice deduction amount for serviceability assessment, do I still need to load the commitment or living expense?	Yes you do. Even if the income is not used for serviceability assessment you must include the commitment or living expense.
Why can't I load Salary Sacrifice deduction amounts as un-taxed income?	If the applicant did not have the deduction pre-tax, then the income would form part of their taxable income.
If I still have to verify details of the commitment related to the salary sacrifice deduction how has this helped me do my job?	Prior to the introduction of the Salary Sacrifice Declaration form, our verification rules had different processes when the employer was a Government and not for profit organisations v's non-Government. Through the introduction of the declaration form, we could simplify the processing of applications with salary sacrifice deductions and help ensure our customers more informed of the income we are using for serviceability assessment.

4.3 General - FAQs

Question

Answer

When using an account statement for verification, do I need every page issued for that statement?

No, you only need the pages which:

Display the information you are verifying, and

Enable you to comply with the Document Standards policy for an account statement

5. Credit

Income types not specifically named in Verifying Income policy are outside of an Assessor’s authority to approve but may be considered by Credit on a case-by-case basis (for example Workers compensation / Workcover).
Credit will determine how the verification is to take place and the income calculation to be used.

Change History

Amendment number

Amendment issue date

Description of changes

3 November 2021

First OBP issue online for Brokers on the OKA platform.

21 November 2021

Change 1
The following note has been added to Supplementary Income for both “Rental Income (in AUD) Not an NDIS property” and “Rental income (in AUD) from a NDIS SDA property”

Where the application also includes self-employed income refer to:
- Self Employed Applicants > Fast track self-employed assessment; or
- Self Employed Applicants > fully verified self-employed

Change 2
Clarified that new non-base methodology applies, during transition scenarios, only where current year annualised is > prior year total earnings. The following wording has been added to process for scenarios #3, #5, #6 and #7
Prefix to existing text which details how non-base is calculated:
Where current year annualised income is > prior year total gross income then:
Following note added to clarify how non-base is determined where current year annualised is < prior year earnings:
Note: Where current year annualised income is < than prior year total gross income, then non-base income is the lower of current year annualised income less current annualised base income or prior year total gross income less current annualised base income.

Change 3
New acceptable Group 2 document type for verification of PAYG income - ATO Pre-filling report. Base plus non base scenario #3 and #4. It is not mandatory to hold all pages of the document, but the pages held must display the ‘Taxpayer details’ and ‘PAYG Payment summaries’

Change 4
Policy wording clarification Supplementary Income types > Rental Income (in AUD) Not an NDIS property > Documents
Old wording
2.Existing rental / lease agreement or Rental statement from licensed - real estate property manager / agent / letting agent ¹ or
New wording
2. Existing rental / lease agreement, or rental statement from a licensed real-estate property manager / agent / letting agent¹

20 February 2022

Change 1 - New content added to section 2.3 Salary or Wage > Base income table:

Salary / Wage – after tax or post tax deduction

After Tax or Post Tax deductions are not an income type but are deductions from the applicant’s net salary, i.e. after tax has been applied and deducted.
The applicant(s) may be using the after tax or post-tax deduction to pay an expense, a commitment (loan) or for superannuation contributions.
If the payslip does not contain sufficient detail to identify what the post-tax deduction amount is being used for, further enquiries are to be made with the applicant(s).
Post-tax deductions must not be entered in the income verification tool. The post-tax deduction it is to be assessed and entered in the assessment tool as per:

Living expense policy, refer specific expense category > expense category table; or
Commitments policy, as per the individual commitment type

Where the post-tax deduction is for a superannuation contribution, treat as a living expense. Refer to Living expenses > Expense category table > Other regular or recurring expenses
Where the applicant tells us they will reduce or cancel any voluntary after tax or post tax deduction to meet their existing commitments and the repayments for the loan they have requested, refer to and follow requirements in:

Living expenses > Reducing living expense; or
Serviceability assessment > Excluding a commitment

Change 2 - amended to content in section 2.3 Salary or Wage > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions to:

Define requirements for the assessment of compulsory employee superannuation contributions where salary sacrificed from pre-tax income.

Change 3 - new content for section 2.3 Salary or Wage > Miscellaneous Salary and Wage types > Family employee and section 3.5 Assessing Miscellaneous salary or wage income > Family employee

Policy has been updated to include requirements for assessing income for serviceability assessment for casually employed family employees, i.e. to be assessed in terms of a casual employee with <3 months YTD or no YTD, and the income calculated may not exceed the total income in the previous year Australian tax return and ATO NOA or tax ready income statement

Change 4 - changes associated with ’Dividend from ASX listed shared (other than from own company)’ and ‘Interest income (other than from own company)’:

2.4 Supplementary income > ’Dividend from ASX listed shared (other than from own company)’ and ‘Interest income (other than from own company)’
- amended content for Document requirements changed to ‘Latest Australian tax return and Australian Taxation Office Notice of Assessment (for both Mortgage Insured and non-mortgage insured loans. Was previously ‘last 2 years personal Australian Tax Returns and Latest ATO NOA’ for Non Mortgage Insured and ‘last 2 years personal Australian Tax Returns and coinciding ATO NOA’ for Mortgage Insured
3.6 Assessing Supplementary income.
- Deleted ‘how to calculate’ instructions, as they are no longer applicable due to the document requirements change detailed above
  Change 5 – Clarification to dividend income (both dividend from ASX listed share and dividend from own company), to specifically state a Franking credit must not be added to the dividend as a franking credit is unacceptable income.

Change 6 – Policy correction to 2.3 Salary or wage > Direct salary credit (casual), Mortgage insured:

Changed to Account Statement(s) from another financial institution covering the latest 2 pay periods, with specific employer name included in the credit narrative (Group 1B). Was previously Account Statement(s) from another financial institution covering the latest 2 pay periods, with specific employer name included in the credit narrative (Group 1B). Final transaction on the statement must not be older than 12 months from formal application date.

Change 7 - Base income (non casual), Mortgage Insured applications are now eligible to use direct salary credit verification method

4 & 5

22 May 2022

Change 1

Introduced “Investment property currently tenanted” and “Investment property not currently tenanted” to Supplementary income- Rental Income.
Removed the hierarchy of rental income verification documents and removed a “valuation report with rental estimate” as a rental income verification document for an “Investment property currently tenanted”.
For an “Investment property currently tenanted” added the following rule for the income verification documents
- Any of the below may be used to verify rental but where more than one of the rental verification documents are held, the most recent document adhering to document standards and MDSM, must be used
For an “Investment property not currently tenanted” the following document requirements were added
- Investment property not currently tenanted.

Any of the below may be used to verify rental but where more than one of the rental verification documents are held, the document with the lowest rental value must be used:

Valuation report (no older than 3 months) with rental estimate or
Licensed real estate property manager’s / agent’s or letting agent email advice.

Change 2

Increased the rental income assessment rate as follows

Prestige property increased from 60% to 70%
When the new loan is not mortgage insured, a standard investment property currently tenanted increased from 80% to 90%

Change 3

Section ‘Rules>Salary or Wage>Base income>Direct Salary Credits’ updated to change existing references using the ‘Full Application Date’ date for measuring maximum age of documents, to using the ‘Responsible Lending Start Date’. Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the’ Responsible Lending Start Date’
Section ‘Rules>Supplementary Income>Annuity’ updated to updated to change existing references using the ‘Full Application Date’ date for measuring maximum age of documents, to using the ‘Responsible Lending Start Date’. Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the’ Responsible Lending Start Date’
Section ‘Rules>Supplementary Income>Child Support Payments’ updated to updated to change existing references using the ‘Full Application Date’ date for measuring maximum age of documents, to using the ‘Responsible Lending Start Date’. Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the’ Responsible Lending Start Date’
Section ‘Rules>Supplementary Income>Private Pension’ updated to updated to change existing references using the ‘Full Application Date’ date for measuring maximum age of documents, to using the ‘Responsible Lending Start Date’. Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the’ Responsible Lending Start Date’
Section ‘Rules>Supplementary Income>Social Security Income’ updated to updated to change existing references using the ‘Full Application Date’ date for measuring maximum age of documents, to using the ‘Responsible Lending Start Date’. Included a link to the ‘ Loan application and approval ’ chapter which has been updated to define the’ Responsible Lending Start Date’

22 May 2022

Links corrected

26 May 2022

Correction to supplementary income, Rental income, “Investment property not currently tenanted”
Updated the documents to be used for verification to specifically state “letter or email advice”. This dot point previously listed only one rather than both “letter or email advice”

17 July 2022

Change 1
Where document type ‘Licensed real estate property manager’s / agents / letting agent email advice’ is referred to throughout the policy, updating to align to MDSM e.g. Licensed – real estate property manager’s / agent’s or letting agent letter or email advice

Change 2

Update to section 3.2 Assessing Base plus Non-Base income > #8 Projected bonus income

The process steps have been amended to accommodate two different scenarios:

Where YTD payslip does not cover a minimum of 3 months, or non-YTD payslips are held

V’s

Where YTD payslip is covering a minimum of 3 months held

Change 3

Removed references to Jobkeeper (ceased in March 2021) as Group 2 documents will be from FY2022
For casually employed applicants have aligned:
- Supporting income document requirements and income assessment methodology for LMI loans with non-LMI loans where the YTD payslip >3 months, i.e. no longer a requirement to obtain a Group 2 document or assess on lower of current year and historical income where the YTD payslip >3 months.
- Employment tenure requirements for LMI loans with non-LMI loans, i.e. minimum 6 months continuous employment in current role with current employer (employment agency). Have removed requirement for prior 12 months history.
For Dependant Contractors have:
- Aligned minimum time in employment for both LMI and non-LMI loans, where considered PAYG, to a minimum 6 months (previously 12 months for LMI) in the same position with the same employer.
The process steps have been amended for casual income assessment to
- amalgamate LMI with non-LMI where the YTD payslip >3 months
- capture full process steps for LMI and non-LMI where YTD payslip <3 months or payslip with no YTD shown.

Change 4
Updated section ‘Salary or Wage > Salary Sacrifice / Fringe Benefit deduction / Pre-Tax deductions’:

Removed QLD Government employees as an example of employees required to pay compulsory super
Added text highlighted in bold: ‘Compulsory employee superannuation contributions, as directed by the applicant's employer. There may be a description of 'Comp' or similar alongside the amount on the payslip, but be aware that this amount may include both compulsory and non-compulsory amounts. Any ‘non-compulsory’ portion as confirmed by the broker/assessor can be included if the Salary Sacrifice Declaration requirements above have been met’
Deleted:
- Note: Some employers may require their employees to make compulsory contributions into their superannuation fund, in return for higher employer contributions over and above the minimum superannuation guarantee.
- Compulsory employee superannuation contributions are usually a percentage of the applicant's income and are generally between 2% and 6%

21 August 2022

Change 1
Impacted section > Rules > Salary or Wage > Base Income > Documents > new document for verification:

Where the borrower is unable to provide the above documents, for example, where base income has changed and the consecutive payslips have different base income amounts, or the YTD earnings do not support the annualisation of the new base income:
- 1 payslip detailing the base income for a full pay period (may be a YTD or non-YTD payslip) and:
- Employer’s letter / Employer’s email advice / Employment contract – for general use. In addition to requirements in Document Standards policy , the letter must confirm the new base income and payment frequency as displayed on the payslip.

Rules > Salary or Wage > Base Income > Conditions > new condition added:

Where the borrower is using a single payslip with an Employer’s letter / Employer’s email advice / Employment contract the borrower must comply with any minimum length of employment rules. For:
- Non-mortgage insured – must have been with the employer for a minimum of two pay cycles;
- Mortgage insured – see below

Change 2
Impacted section > Salary or Wage > Time in employment changed for FT and PT employment:
From:

The minimum length of employment for Full-Time or Part-Time employment is 6 months. If less than 6 months in current employment must have a record of previous employment in the same occupation for at least 2 continuous years, with maximum 1 month gap between positions. Note: Prior employment in same occupation may have been with a different employer.

The minimum length of employment for Full-Time or Part-Time employment is 3 months. If less than 3 months in current employment, must have a record of total employment history in the same occupation of at least 12 months, with a maximum 2 month gap between positions.

Note: Prior employment in same occupation may have been with a different employer.
From:

Applicant must have been employed for a minimum of 3 months across both financial years with the same employer (minimum of 6 months is required for Mortgage Insured Loans). Where time frame is not met³, assess as per ' Base income'

To
For both Mortgage insured and Non-Mortgage insured loans:

Applicant must have been employed for a minimum of 3 months across both financial years with the same employer. Where time frame is not met³, assess as per ' Base income'

From:
An application may be referred to Credit for consideration to use non-base income for serviceability assessment where:

the applicant has been employed in the same role for greater than 3 months non-mortgage insured or 6 months mortgage insured but with different employers; and
it can be established the applicant is continuing to earn non-base income

To:
An application may be referred to Credit for consideration to use non-base income for serviceability assessment where:

the applicant has been employed in the same role for greater than 3 months but with different employers; and
it can be established the applicant is continuing to earn non-base income

Change 3
Updated section ‘Process > Assessing base income > Salary Sacrifice; or
Fringe Benefit deduction; or
Pre-Tax deduction’:

Deleted step 9. ‘If using the Salary Sacrifice amount for serviceability, deduct the amount from the base salary and enter it as a separate income under Salary discretionary - Salary sacrifice / packaging’

Change 4

Throughout the document:
- Deleted references to the ‘Minimum Document Standards Matrix’. The matrix has been superseded, with all matrix rules transferred into the main body of the ‘Document Standards’ chapter.
- Deleted repeated references to the ‘Document Standards’ chapter, where a link is already present to the ‘Assessing Income Document Standards’ sub-section (as that section already links to the ‘Document Standards’ chapter)

2 October 2022

Change 1
Update to content in section 2.6 Foreign income and employment > all foreign income types
Old wording

Confirm the applicant is acceptable to the bank as per Migrant Lending > Visa Matrix and Applicant via Resident Type Matrix before commencing loan assessment.

New wording

Confirm the applicant is acceptable to the bank as per Lending to Non-Australian Citizens :
- Visa Matrix
  - Acceptable Visas
  - Unacceptable Visas

Change 2
Added new attachment ‘ Acceptable country / currency list’ (this document was previously attached to chapter 03.14 Non-Resident Lending – which is to be decommissioned 02 Oct 2022)
Change 3
Update to section 3.8.2 Loan applications and approval where the applicant is earning foreign income > Loan applications
Old wording
Resident of' field in OBP to be completed as indicated in the Applicant via resident type matrix in the Migrant lending policy
New wording
No lending is permitted where any applicant is considered to be a non-resident (refer to definition Lending to Non-Australian Citizens > Rules you must apply > N on-Resident Lending), the following process is provided for applicants earning foreign income:
Change 4
Update to Assessing base income > Account credits to remove reference to non-base income as account credits can only be used to determine base income.
Old wording
‘Determine base and non-base income’
New wording
‘Determine base ‘
Change 5
Updated section ‘ What is income verification?’:

Included words and link highlighted in bold
- Any servicing (variation) activity requiring a serviceability assessment

Change 6
In Supplementary Income added Rental income (in AUD) Rent received on a short term basis.
Rental Income (in AUD) Not an NDIS property has been updated adding “Rent received on a long term basis” to the income type.
Deleted Mortgage insured applications
Rent from serviced apartments and rural residential are not acceptable

Note : For OBP loan applications assessed under the fully verified assessment method, refer to Self Employed Applicants > Rental income - fully verified self-employed assessment
In the conditions section:
Added:
Investment property where the loan is non-mortgage insured and not currently tenanted.
Rent will be assessed at 80%.
Investment property where the loan is non-mortgage insured and currently tenanted.
Rent will be assessed at 90%.
Deleted:
Standard investment property where the loan is non-mortgage insured and currently tenanted. Rent will be assessed at 90%. Definition of 'standard real estate' as per Acceptable Security Collateral > What is residential real estate security collateral and the investment security is not:
Located in concentration risk postcode; or
Prestige property; or
Defence Housing Authority; or
NRAS security under a Head lease; or
Commercial property
Untenanted at time of assessment
Serviced apartments has also been deleted from mortgage insured loans.
Change 7
In the Self-Employed Income table, “Fully verified self employed latest year income assessment or COVID recovery (FY 2019) Income assessment” has been deleted

In “Assessing Self-employed Income”
Updated:
“Fully verified self-employed standard assessment 2 year average” to Fully verified self-employed:
2 year average
Or
Latest year
Deleted:
Fully verified self-employed
- Latest Year Income Assessment
(Non-LMI Only)
Fully verified Self-Employed
COVID Recovery (FY 2019) Income Assessment
(Non-LMI Only)

20 November 2022

Change 1
Under section ‘Self Employed income > Partners from selected companies’ included the below companies:

Gilbert & Tobin
Pitcher Partners
Binder Dijker Otte – BDO
William Buck

Change 2
Update to content in section 2.6 Foreign Income and employment
Old wording
All foreign income types

Where assessing applicants who receive foreign income all of the below apply:

In the event foreign income and supporting documents are not in English:
The applicant is to supply both the original document and an English translation prepared by an accredited translator at their own cost.
The translated document is to be stamped with translators NAATI stamp

Translation of documents by either a Westpac Group staff member or a Westpac Group Finance Broker is not permitted. Refer https://www.naati.com.au/# for a list of translators in your local area (click on the "online directory").
Link to Translation checklist
New wording
All foreign income types

Where assessing applicants who receive foreign income all of the below apply:
In the event foreign income and supporting documents are not in English or display a currency other than AUD, refer to Document Standards policy > When supporting documents are not in English or display a currency other than AUD

Change 3
Document renamed from ‘Translation checklist’ to ‘Foreign currency translation checklist’ this update has been made to reflect the name used in the Home lending toolkit calculator.

Change 4
Update to Supplementary Income > Child Support Payment / Maintenance > Documents
Old wording

Government letter

New wording
Either:

Government letter; or
Child support assessment extract from myGov portal

Change 5
Under section ‘Assessing Supplementary income’, clarification change under:

‘Fully Maintained Company Car’ updated to state ‘Enter $5k into the field 'Gross Amount' and select the 'Yearly’ Frequency'.
‘Fringe benefits’ updated from ‘1. if only the fully maintained car is being accepted then treat as "Fully maintained Company Car" in the income matrix above, i.e. add $5k gross per annum to base salary and tax.’ to ‘1. if only the fully maintained car is being accepted then treat as "Fully maintained Company Car" in the row above’

Change 6

Update to ‘Supplementary Income > income type > Dividend from ASX listed shares (other than from own company)’:

Old wording

Latest Australian tax return and Australian Taxation Office Notice of Assessment

New wording

Latest Australian tax return and
- Australian Taxation Office Notice of Assessment, or
- If ATO NOA has not issued: Australian Tax Return lodgement extract from MyGov Portal

Old wording
For both Mortgage Insured and Non-mortgage insured loans:

If latest Australian tax return and Australian Taxation Office Notice of Assessment is not available = refer to Credit with current investment certificate and bank account statements evidencing payment over a 6 month period
New wording
For both Mortgage Insured and Non-mortgage insured loans:

If the above documents are not available = refer to Credit with current investment certificate and bank account statements evidencing payment over a 6 month period

Change 7

Update to ‘Self Employed Income > income type > Fully verified - Medico Assessment’:

Old wording
Non-mortgage insured
Where self-employed and applying under Medico Sector policy

May be assessed using the Fast Track Self-employed assessment method or

The last 1 years:

Personal Australian Tax Return, and Australian Taxation Office Notice of Assessment (whilst preferable to hold all pages of the NOA, minimum requirement is for page 1 (front page) of the NOA to be held for Fully verified Self-employed)

New wording
Non-mortgage insured
Where self-employed and applying under Medico Sector policy

May be assessed using the Fast Track Self-employed assessment method or

The last 1 years:

Personal Australian Tax Return, and:
- Australian Taxation Office Notice of Assessment (whilst it is preferable to hold all pages of the ATO NOA, the minimum requirement is for page 1 (front page) of the ATO NOA to be held for Fully verified Self-employed); or
- If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal

Change 8

Update to ‘Self Employed Income > income type > Professional sportsperson’:

Old wording
Non-mortgage insured
Performance based and employed less than 2 years:

Latest Australian tax return and Australian Taxation Office Notice of Assessment

New wording
Non-mortgage insured
Performance based and employed less than 2 years:

Latest Australian tax return; and
- Australian Taxation Office Notice of Assessment; or
- If ATO NOA has not issued: latest Australian Tax Return lodgement extract from MyGov Portal

19 February 2023

Change 1
Updated content in section Process to follow > 3.6 S upplementary income > Dividend from ASX listed shares (other than from own company) or Interest Income (other than from own company)
Removed wording “ Select the Employer Name in the Additional Details screen”
Not required in OBP work instruction

Change 2
To align policy wording with the calculators new name t hroughout this chapter, c hanged references
from ‘income verification tool’
to ‘employer income calculator’

Change 3
Update to content in section 2.3 Salary or wage > Base income – Payslips > Documents
Old wording
Either:

1 YTD payslip (Group 1A) detailing base income, covering last 2 pay cycles;

Last 2 consecutive² payslips^# (Group 1A) detailing base income, includes where the payslip does not cover 2 pay cycles^# (YTD or non-YTD)

Where the borrower is unable to provide the above documents, for example, where base income has changed and the consecutive payslips have different base income amounts, or the YTD earnings do not support the annualisation of the new base income:
- 1 payslip detailing the base income for a full pay period (may be a YTD or non-YTD payslip); and
- Employer’s letter / Employer’s email advice / Employment contract – for general use. In addition to requirements in Document Standards policy, the letter must confirm the new base income and payment frequency as displayed on the payslip.

New wording
Either:

1 YTD payslip (Group 1A) detailing base income, covering last 2 pay cycles;

Last 2 consecutive² payslips^# (Group 1A) detailing base income, includes where the payslip does not cover 2 pay cycles^# (YTD or non-YTD)

or
Where the borrower is unable to provide the above documents due to:

A recent increase to their base income (i.e. consecutive payslips have different base income amounts or the YTD earnings do not support the annualisation of the new base income), or
Having recently commenced new employment

Then:

The following documents may be used to complete verification:
- 1 payslip detailing the new base income for a full pay period (may be a YTD or non-YTD payslip); and
- Employer’s letter / Employer’s email advice / Employment contract – for general use. In addition to meeting requirements in Document Standards policy, the document must support the new gross base income / employment as shown on the payslip.

Note: Any minimum time in employment requirement must be met for mortgage insured loans

Change 4
Update to content in section 2.3 Salary or wage > Base Income – Direct Salary Credits as follows:
Old wording
Salary credit cannot be split between Westpac group brands or multiple other financial institutions
New wording
Salary credit can be split between Westpac group brands or multiple other financial institutions

Change 5
Update to content in section 2.3 Salary or Wage > Miscellaneous Salary and Wage types > Family employee (permanent)
Old wording

Conditions

Family employee - Spouse of business owner

Applicant has PAYG income from a business wholly or partially owned by their spouse. Applicant is not an owner of the business.

Family employee - Non-spousal family member of the business owner

Person employed by a family owned business and not an owner of the business.

Note: An owner of the business must be assessed as self-employed. Refer to Self-employed income.

All other requirements:

Same as Base plus Non-Base income, YTD payslip or payslip and ATO YTD income statement covering a minimum of 3 months

^# Transition between financial years
Permitted for payslips covering pay cycles from 1 July to 30 September only.

where 2 consecutive² payslips are not from the same financial year, then:
- the most recently issued consecutive payslip must from this financial and
- the older payslip must be the final payslip from the immediately previous financial year

Notes:

Both documents must be from the same employer and
Documents must be consecutive
The income calculated may not exceed the total income in the previous year Australian tax return and ATO NOA or tax ready income statement

New wording

Conditions

Family employee - Spouse of business owner

Applicant has PAYG income from a business wholly or partially owned by their spouse. Applicant is not an owner of the business.

Where the applicant’s spouse is a co-borrower / income guarantor or assessed under Serviceability Assessment policy > Apportioned household expenses and shared commitments – Spousal same household on the new loan, the applicant may be assessed as:

PAYG using documents listed above for Family employee (permanent);

The same as a self-employed applicant, where assessed using the same self-employed income assessment method used to verify the applicant’s spouses’ income, e.g. fully verified, Fast Track

Where the applicant’s spouse is not a co-borrower / income guarantor or assessed under Apportioned household expenses and shared commitments on the new loan, the applicant must be assessed as:

PAYG using documents listed above for Family employee (permanent)

Family employee - Non-spousal family member of the business owner

Person employed by a family owned business and not an owner of the business.

Note: An owner of the business must be assessed as self-employed. Refer to Self-employed income.

All other requirements:

Same as Base plus Non-Base income, YTD payslip or payslip and ATO YTD income statement covering a minimum of 3 months

^# Transition between financial years
Permitted for payslips covering pay cycles from 1 July to 30 September only.

where 2 consecutive² payslips are not from the same financial year, then:
- the most recently issued consecutive payslip must from this financial and
- the older payslip must be the final payslip from the immediately previous financial year

Notes:

Both documents must be from the same employer and
Documents must be consecutive

The income calculated may not exceed the total income in the previous year Australian tax return and ATO NOA or tax ready income statement

Change 6
Update to content in section 2.4 Supplementary Income > Rental Income (in AUD) – Not an NDIS property – Rent received on a long term basis
Old wording

Documents

For both Mortgage Insured and Non-Mortgage Insured loans.

Investment property currently tenanted:

Any of the below may be used to verify rental income, but where more than one of the rental verification documents are held, the most recent document adhering to Document Standards policy must be used

Existing rental / lease agreement, or Rental statement from licensed - real estate property manager / agent or letting agent; or
Contract of Sale where the property is being purchased subject to an existing tenancy. Note: transaction is being completed at arm's length through an independent Australian based real estate agent (i.e. not private sale); or
Account transaction listing produced internally from a Westpac group system, over a 3 month period, with the credit narrative aligned to the income; or Account statement from other financial institution, over a 3 month period, with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively covering a 3 month period, with the credit narrative aligned to the income. Final transaction on the statement must be no older than 12 months from the Responsible Lending Start Date; or
Latest Australian tax return and Australian Taxation Office Notice of Assessment (refer specific rental Property statement in the ATO return).

Note:
Where the application also includes self-employed income refer to:

Self Employed Applicants policy > Fast track self-employed assessment; or
Self Employed Applicants policy > Rental income - fully verified self-employed assessment

Investment property not currently tenanted

Any of the below may be used to verify rental income, but where more than one of the rental verification documents are held, the document with the lowest rental value must be used:

Valuation report (no older than 3 months) with rental estimate;

Licensed real estate property manager's / agent's or letting agent letter or email advice.

Note:
Where the application also includes self-employed income refer to:

Self Employed Applicants policy > Fast track self-employed assessment; or
Self Employed Applicants policy > Rental income - fully verified self-employed assessment

New wording

Documents

Existing rental / lease agreement, or Rental statement from licensed - real estate property manager / agent or letting agent;

Note: Where the existing rental / lease agreement exceeds Document standards > Age of documents policy, a combination of documents may be used to complete verification, refer Document Standards > Minimum Document Standards Table > Rental / lease agreement and Using a combination of documents to complete verification
or

Contract of Sale where the property is being purchased subject to an existing tenancy. Note: transaction is being completed at arm's length through an independent Australian based real estate agent (i.e. not private sale);

Account transaction listing produced internally from a Westpac group system, over a 3 month period, with the credit narrative aligned to the income; or Account statement from other financial institution, over a 3 month period, with the credit narrative aligned to the income; or Account transaction listing from another financial institution and Account statement collectively covering a 3 month period, with the credit narrative aligned to the income. Final transaction on the statement must be no older than 12 months from the Responsible Lending Start Date;

Latest Australian tax return and Australian Taxation Office Notice of Assessment (refer specific rental Property statement in the ATO return).

Note:
Where the application also includes self-employed income refer to:

Self Employed Applicants policy > Fast track self-employed assessment; or
Self Employed Applicants policy > Rental income - fully verified self-employed assessment

Valuation report (no older than 3 months) with rental estimate;

Licensed real estate property manager's / agent's or letting agent letter or email advice.

Note:
Where the application also includes self-employed income refer to:

Self Employed Applicants policy > Fast track self-employed assessment; or

Self Employed Applicants policy > Rental income - fully verified self-employed assessment

26 March 2023

Change 1
Policy re-write to:

remove procedures from policy
relocate some PAYG Salary or Wage Income and Employment definition from Glossary to this chapter
re-format and re-wording of policy to improve readability
add clarification for mortgage insured loans:
- rental income from an NDIS property:
  - is unacceptable if the property is Rural Residential
  - must not exceed 50% of total income (refer to Credit for consideration above 50%)
add clarification (detailed in bold below) to ‘Base Income (AUD)’, ‘Base plus Non-base income (AUD), ‘Family Employee Full Time or Part Time (AUD’):
- Where no base rate is available: Verify income using Casual method (casual time in employment rules do not apply where full-time or part-time employed)

Change 2
The below legend items (and associated footnotes) have been removed from this chapter

Legend item ‘#1 ABN Search’: Supported by an Australian Business Number Registration Search via ABN Lookup if employer's name is not provided on the supporting documents –this rule has been moved to ‘Document Standard Policy’
Legend item ‘#2 Age of consecutive payslips’: Where 2 consecutive payslips are required, the most recently issued consecutive payslip must adhere to age of document requirements – this is a repeat of information already contained in the ‘Document Standard Policy’
Legend item‘#4 Age of payslip exceeds age of document requirements
(as per Document standards policy)’: It is acceptable to use older payslips (no older than 4 months) supported by current account statement or account transaction listing or account summary / extract / overview, evidencing credits to the account are equal to or greater than amount shown on payslip:
- Source is consistent with payslip. Employer is the same; and
- Frequency of deposit is consistent with pay cycle; and
  - Amount credited to account is equal to or greater than net amount shown on payslip (where amount credited is greater, the amount shown on payslip applies in all cases)

Note: Account statement or account transaction listing or account summary / extract / overview are as per Document standards
- this rule has been moved to ‘Document Standard Policy’
Change 3
Wording updated for ‘Income not used for servicing the loan’ (clarification only change):
Old wording:

For Non Mortgaged insured loans
Applicants are not required to provide evidence of income where it is not used to service the loan, unless:

required for self-employed applicants as detailed above in 'For all loans', or;
specifically requested by Credit on a case by case basis

Example: If an application services on base income then it is not required to verify rental income or income from other investments.

For Mortgaged Insured loans

All applicants are to provide satisfactory documentation to verify employment/ income.

Important:

Brokers need to include in ApplyOnline notes that other income might be available but is not required for serviceability

New wording;
Applicants are not required to provide evidence of income where it is not used to service the loan, unless:

required for self-employed applicants as detailed under ‘Self-employed income, Directorships, company shareholding, ABN’ or
specifically requested by Credit on a case-by-case basis

Action required:
Where any income type is evident on a verification document but is not used, notes must be entered to explain why this is the case.
For PAYG Salary or Wage income, this includes using a lower base income figure and not using non-base income.

Change 4
Updated rules related to ‘ Salary Sacrifice / Fringe Benefit deduction / Pre - Tax deductions’:

Completion of the ‘Salary Sacrifice Declaration' form has been replaced by inputting required salary sacrifice details into the application
The required salary sacrifice details (previously captured in the ‘Salary Sacrifice Declaration' form) have changed:

	Previous Rules	New Rules
Additional superannuation contributions above SG	The declaration must confirm: The deduction is not required to repay Self-Managed Super Fund borrowings; and The deduction is voluntary, can be cancelled at any time and received as taxable income; and The customer will cancel the deduction if required to meet their existing commitments and the repayments for the loan they have requested	Can be added back to gross income for servicing after confirming with the customer that: The deduction is voluntary, can be cancelled at any time and received as taxable income; and The customer will cancel the pre-tax deduction if required to meet their existing commitments and the repayments for the loan they have requested
Purchased leave	The declaration must confirm: The deduction is voluntary, can be cancelled at any time and received as taxable income; and The customer will cancel the deduction if required to meet their existing commitments and the repayments for the loan they have requested	Can be added back to gross income for servicing after confirming with the customer that: The deduction is voluntary, can be cancelled at any time and received as taxable income; and The customer will cancel the pre-tax deduction if required to meet their existing commitments and the repayments for the loan they have requested
For all other purposes	The declaration must confirm: The deduction is voluntary, can be cancelled at any time and received as taxable income	Can be added back to gross income for servicing after confirming with the customer that: The deduction is voluntary, can be cancelled at any time and received as taxable income; and The customer will cancel the pre-tax deduction if required to meet their existing commitments and the repayments for the loan they have requested
Novated leases and other commitments	Previously assessed under the category ‘For all other purposes’	Can be added back to gross income for servicing when the related commitment is captured in the loan application and verified as per Commitments policy
Categorisation of ‘Salary sacrifice / Fringe benefit deduction / Pre-tax deduction’ types	Categories were: Additional superannuation contributions above SG Purchased leave All other purposes	Categories are: Superannuation contribution, purchased leave, salary packaging or other purposes not documented Novated leases and other commitments

Change 5
Section: Rules > Verifying Foreign income and/ or Foreign Employment

Clarification as below:

‘Applications are to be assessed using this policy, where an applicant, income guarantor (WBC only) or individual assessed under Serviceability Assessment policy > Apportioned household expenses and shared commitments – Spousal same household:

- Is earning income in a foreign currency
- Is not working in Australia and its territories, this includes, but is not limited to, applicants employed by an Australian entity, but working outside Australia and its territories.
- Is employed by a foreign employer which is not registered in Australia, i.e. does not have an Australian Business Number (ABN)’
re-formatted and re-worded of policy to improve readability (refer to Change 1)
replaced content already included in other chapters with a link to the other chapter
removed procedures from policy (refer to Change 1)

moved content relating to joint applicants to section LVR > LVR by borrower type and income source
added below policy rules for ‘Base salary or wage income (AUD) – from Foreign Employment

New wording

Base salary or wage income (AUD) - from Foreign Employment Australian citizen, New Zealand citizen and Permanent resident (Ordinarily resident in or outside Australia) OR Temporary resident (Ordinarily resident in Australia)
Definition	Base income: as per Verifying PAYG Salary Wage income (AUD) > Base income
Documents
Non - mortgage insured			Mortgage insured
1 YTD payslip, covering 2 pay cycles, or Last 2 consecutive payslips AND Account statement covering a minimum of 3 months’ salary credits, with the employer’s name included in the credit narrative, or Latest Australian tax return and Australian taxation office Notice of Assessment			The same as ‘Non – Mortgage insured’, excluding: Mortgage insurance is not available for: New Zealand citizen or Permanent resident where ordinarily resident outside Australia
ASSESSMENT / INCOME CALCULATION
100% base 0% non-base
Where payslip is supported by: 3 months’ salary credits, income used is: Gross base salary from payslip(s), Latest Australian tax return, income used is the lower of: Gross base salary from payslip(s), and Assessable foreign income from personal Australian Tax return
ADDITIONAL CONDITIONS
Eligibility		Must comply with Verifying Foreign Income and / or Foreign Employment > Restrictions and Conditions F or c onsideration of non-base income, refer to Credit with strong supporting mitigants and justification
Varying income on documents		Where: The base income amount varies between payslips, the payslip with the lowest base income must be used Payslip(s) is supported by salary credits, the net salary credit(s) on the account statement must match the net pay amount on the payslip(s)
Foreign income team assessment		Where all income earned is in Australia Dollars (AUD) and credited to an Australian financial institution account, assessment by the foreign income team is not required

26March 2023

Correction to section: Rental Income (AUD) - Not an NDIS property
Removal of duplicated Income Reliance row only

21 May 2023

Change 1
Rental income shading for standard “Not NDIS” and “From NDIS” (non-tenanted) reduced to 10% - Including Mortgage Insurance deals (with exception of Rural Residential property)

Change 2
Minor wording update to section Base plus non base (AUD) income – Non-Standard ‘Projected bonus’
Old wording

Projected bonus can only be used to the lower of the:
- projected bonus amount; or
- total gross income from the immediately previous financial year, less the current gross annualised base, less current annualised non-base (including any bonus already received)
Bonus income already received will be removed prior to annualisation of YTD income

New wording

Projected bonus can only be used to the lower of the:
- projected bonus amount; or
- total gross income from the immediately previous financial year, less the current gross annualised base, less current annualised non-base, less any bonus already received
Bonus income already received will be removed prior to annualisation of YTD income

Change 3
Updated link from ‘Validation of Information provided by the customer’ to ‘Loan Application and Approval > Validation of information provided by the customer

20 August 2023

Change 1
• Deleted below ‘Verifying PAYG Salary or Wage income > Base plus non-base income (AUD) – Non- standard ‘Projected Bonus’:

Base plus non base (AUD) income – Non-Standard ‘Projected bonus’ Optional method
Definitions	Used where: projected Bonus income is to be received in the current financial year; or a combination of already received Bonus and projected Bonus income is required for serviceability
DOCUMENTS
Obtain ‘primary’ documents as per an available method 'Verifying: ‘Base plus non-base Income (AUD) – Standard method’, ‘Base plus non-base Income (AUD) – Non-standard method –‘Base income increased’, ‘Dependant Contractor (AUD)’, ‘Emergency Services Employee (AUD)’, ‘Family Employee -Full Time or Part Time (AUD)’ AND where not already obtained, one of: Latest PAYG Payment Summary, or Latest tax ready ATO Income Statement; or Latest Australian Tax Return and Australian Taxation Office Notice of Assessment AND Prior financial year payslip(s) with details of every historical bonus amount(s) received that year* *It is acceptable for this document to exceed Document standards > Age of document requirements.
ASSESSMENT / INCOME CALCULATION
Annualised base assessed at 100%, annualised non-base assessed at 80% For Mortgaged insured loans: Bonus income can be accepted under OVA up to a maximum of $30k (before shading) per annum per borrower or income guarantor. Amounts higher than $30k require referral to credit.
Projected bonus can only be used to the lower of the: projected bonus amount; or total gross income from the immediately previous financial year, less the current gross annualised base, less current annualised non-base less any bonus already received Bonus income already received will be removed prior to annualisation of YTD income
ADDITIONAL CONDITIONS
Eligibility		Projected bonus income cannot be used when current annualised income is greater than the total prior year income.
Also refer to ‘Assessment’ and ‘Additional Conditions’ applicable to the method used 'Verifying: ‘Base plus non-base Income (AUD) – Standard method’, ‘Base plus non-base Income (AUD) – Non-standard method –‘Base income increased’, ‘Dependent Contractor (AUD)’, ‘Emergency Services Employee (AUD)’, ‘Family Employee -Full Time or Part Time (AUD)’

Updated ‘PAYG Salary or Wage income - Definitions and Time in Employment > Bonus income’ to remove ‘paid’, ‘projected’ or ‘paid ‘and ‘projected’ and to direct to new rules for ‘Verifying PAYG Salary or Wage income > Bonus Income (AUD)’
Removed ‘Bonus (paid or projected)’ from the definition of ‘Non-Base Income (AUD)’ and added it as an exclusion
Added a new ‘Additional Condition‘ of ‘Refer to ‘Verifying PAYG Salary or Wage income > Bonus Income (AUD)’ when bonus income is also being used for serviceability.’ Change made under:
- ‘Verifying PAYG Salary or Wage income > Base income (AUD)
- ‘Verifying PAYG Salary or Wage income > Base income Plus Non-base income (AUD) – Standard
- o ‘Verifying PAYG Salary or Wage income > Base Plus Non-base income (AUD) - Non-Standard ‘Base income increase’
- o ‘Verifying PAYG Salary or Wage income > Casual (AUD)’
- o ‘Verifying PAYG Salary or Wage income > Family Employee – Casual (AUD)’
- o ‘Verifying PAYG Salary or Wage income > Emergency Services (AUD)
- o Updated the Verifying PAYG Salary or Wage income > Casual (AUD)’ to specify that the ‘Direct Salary Credits’ method is not available when the salary credit includes bonus income
Update to exclude bonus income from all income calculations associated with:
- ‘Verifying PAYG Salary or Wage income > Base income (AUD)
- ‘Verifying PAYG Salary or Wage income > Base income Plus Non-base income (AUD) – Standard
- o ‘Verifying PAYG Salary or Wage income > Base Plus Non-base income (AUD) - Non-Standard ‘Base income increase’
- o ‘Verifying PAYG Salary or Wage income > Casual (AUD)’
- o ‘Verifying PAYG Salary or Wage income > Family Employee – Casual (AUD)’
- o ‘Verifying PAYG Salary or Wage income > Emergency Services (AUD)
Deleted rules and section ‘Verifying PAYG Salary or Wage income > Base Plus Non-base (AUD) income- Non-Standard Projected Bonus’
Added new section and new rules for Bonus Income under ‘Verifying PAYG Salary or Wage income > Other PAYG Salary or Wage Income > Bonus Income’
Deleted all references ‘For Mortgaged insured loans: Bonus income can be accepted under OVA up to a maximum of $30k (before shading) per annum per borrower or income guarantor. Amounts higher than $30k require referral to credit.’

Change 2
Added a new ‘additional condition’ for rental income types of Rental Income (AUD) – Not an NDIS property (long term rental) and Rental Income (AUD) - From a NDIS property (long term rental):

Essential repairs noted on Full Valuation

Where a valuer comments that the property is unsuitable to rent due to repairs being required, and the value of the repairs is within acceptable tolerances, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, and:

The valuer has provided an estimated rental amount, subject to the repairs being completed, and
The borrower(s) has sufficient funds to complete the repairs, as evident in the borrower’s declared asset position

Then

The Valuers rental estimate (where acceptable as detailed above), post the repairs being completed, may be included in the Serviceability assessment.

Note: Where the Valuer has not provided an estimated cost of the repairs or recommends an independent professional opinion be sought, then rental income cannot be included for that property unless:

an estimated cost / quote(s) for the repairs is held, and
the borrower(s) has sufficient funds to complete the repairs, as evident in the borrower’s asset position.

Where the cost of the repairs exceeds acceptable tolerances, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, the application must be referred to Credit consideration

Change 3
Added a new ‘additional condition’ to ‘Rental Income (AUD) – Not an NDS property

Property under construction

Where the property under construction is:

A security collateral in the new loan application, the verified rental income for that property can be included in the serviceability assessment, or
An asset property in the new loan application, the verified rental income for that property may only be included in the serviceability assessment where the full corresponding commitment (i.e. the loan limit once the loan is fully drawn) is:
- included in the application, and
- verified to the loan contract or internal WBG system extract or enquiry.

Change 4
Updated section 2.1 Verifying PAYG Salary or Wage income > Base income (AUD) using payslips to remove the requirement for the payslip to cover the full pay period where an applicant has recently commenced employment or received a base increase
Change 5
Updated section 2.1 Verifying PAYG Salary or Wage income > Dependent Contractor (AUD) to remove the requirement to provide an Employment contract or Employer's email or Employer's letter.
Old wording
If the contractor:

Has access to annual leave and sick leave, assess as per:
Base Income (AUD); or
Base plus non-base income (AUD) (standard or non-standard method); or
Does not have access to annual leave and sick leave, assess as per:
Casual Income (AUD)

AND

Employment contract; or
Employer's email; or
Employer's letter

Document must confirm contract term, contract expiry date and if the contract includes annual leave and sick leave entitlements.
New wording
If the contractor:

Has access to annual leave and sick leave*, assess as per:
- Base Income (AUD); or
- Base plus non-base income (AUD) (standard or non-standard method); or
- Bonus Income (AUD)
Does not have access to annual leave and sick leave, assess as per:
- Casual Income (AUD)

*Note: Where an applicant receives annual / sick leave, but it is not evident on the payslip, a combination of documents can be used to confirm employment type, refer Document Standards > Using a combination of document to complete verification (e.g. employment Letter / email advice or Employment contract)
Change 6
Updated ‘Additional Conditions’ for Base Income

Condition wording changed from: ‘Varying base rate or house on document’ to : ‘Varying base hourly rate or hours on document’
Condition wording changed from: ‘No base rate available’ to : ‘Base income not available on document’

Attachments

Attachment

03.27 Acceptable country & currency list.pdf

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03.28 Glossary

Policy ID

03.28

Policy Name

Glossary

Policy Content

This policy contains commercially sensitive and confidential information. No part should be made available in any form whether printed, electronic or otherwise, outside the Westpac Group without approval from Westpac Legal or Regulatory affairs.*** This document is an UNCONTROLLED copy and is subject to change without prior notification. It is only valid at the date of extract. ***

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This glossary contains a definition of common terms used throughout the Consumer Credit Policy.

Term	Definition
ABN	Australian business number
ABSTUDY SSL	SBSTUDY student Start-up Loan See Study and Training Support Loans
ACLN	Australian credit license number
ACN	Australian company number
Add Backs	Used when calculating the income for self-employed applicants - adding to the net income of certain expenditure items, e.g. Depreciation and interest.
Additions to an already established dwelling	The addition of further living area(s) to an already established dwelling. The changes may include: increasing living area(s) via new rooms or extra storey, and may involve full or partial demolition of the existing dwelling, or the construction of an attached or standalone dwelling on the title, e.g. granny flat, providing no more than 2 areas of occupancy on the title Refer to Qualifying Development Cost
Administration fee (also known as Management fee)	Ongoing loan fee, charged on the account monthly, for administration of the account. This is in addition to the establishment fee or loan set-up costs.
Aged care facility	A special-purpose facility which provides accommodation and other types of support, including assistance with day-to-day living, intensive forms of care, and assistance towards independent living. Refer LVR > Rules > Unacceptable Securities
ALMI	Arch Lenders Mortgage Indemnity
Appropriation	Take possession of / devote money etc to special purposes
APRA	Australian Prudential Regulation Authority - The prudential regulator of the Australian financial services industry (Banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurance, friendly societies and most of the superannuation industry.
ASIC	Australian Securities and Investments Commission - government body that acts as Australia's corporate regulator. ASIC role is to enforce and regulate company and financial services laws to protect Australian consumers, investors and creditors.
"As is" valuation	This type of valuation refers to the property as it is currently presented. Properties may be a long term established property, or newly completed and never previously occupied.
Asset collateral	Real estate property which is already owned by the borrower but is not security collateral for the loan being referred to/assessed. An 'Asset collateral' may be security collateral for another loan (internal or external) or may be unencumbered
Assets	Items of value owned by a party, e.g. land, buildings equipment
ATO	Australian Tax Office
AVM	Automated Valuation Model. AVM is used to confirm contract of sales value in higher risk situations or to validate an estimate of the property value provided by the customer. An Automated Valuation Model (also known as Modelled Estimate, Electronic Assessment, E-Val) is a statistical estimate of the property value based on historical sales of the property and similar in the immediate area. For this reason use is restricted to areas where there have been sufficient sales of similar properties to provide a valid range of values. The AVM is used to confirm contract of sale values in higher risk situations or to validate an estimate of the property value provided by the customer. Refer Security Collateral Value > Rules > Assessing security collateral value using Automated Valuation Model
Base Loan amount	Is the loan amount: Excluding MI premium capitalisation Where the MI premium is not being capitalised Where MI does not apply
Base LVR	Is the LVR: Excluding MI premium capitalisation Where the MI premium is not being capitalised Where MI does not apply.
Benchmark Repayment Amount	A repayment value which has been calculated by the Bank for serviceability purposes only
Boarder	Someone who occupies a property (who has access to part or all of the property) but they: Do not own the property (their name does not appear on the certificate of title) Are not purchasing the property (their name will not appear on the certificate of title post settlement) Are not formally included on any rental agreement for the property (they are not the tenant named on the rental / lease agreement) AND The owner of the property (or the formal tenant) keep control over the whole premises. The owner or formal tenant are considered to be the landlords of the boarder. Note: An applicant may be considered a boarder even where no payment is made for the use of the property. Including but not limited to, where the borrower is living with their parents, spouse, another family member (e.g. sibling or dependant), friend or employer provided accommodation.
Boarding House	Premises that provide boarders and lodgers with sleeping and residential quarters equipped with beds and may have common and shared facilities such as kitchen, bathrooms and living area. Refer to Rental income received on a short term basis and LVR > Rules > Unacceptable Securities
Body corporate	Statutory Corporation created under the Strata Titles Act, representing the proprietors of home units in a block of units. The Body Corporate is concerned with the control, management and administration of the building and surrounds as well as payments of insurance premiums, rates, taxes etc. Home unit owner's pay for outgoings including the cost of repair and maintenance of the building and common property areas generally - these are called Body Corporate fees. Common property is the property which is not divided into individual lots (home units), e.g. stairs, gardens etc
BoM	Bank of Melbourne
Borrowing entity	The debtor (i.e. the person who borrows the money). The borrower is not always the mortgagor. See definition of Mortgagor.
Break costs	A fee which may be payable for early payout or switch from an existing fixed rate loan. The Loan Contract will define whether these costs may be payable and how they will be applied. They are a reasonable estimate of the Bank's loss incurred when a fixed rate period is broken.
BSA	Bank of South Australia
Buffer rate	An amount which is added to the customers actual final interest rate as part of determining the Serviceability Assessment Rate Refer Serviceability Assessment
Bureau Report	Various Credit Reporting Agencies provide a report on loan applicants. E.g. Equifax and Illion.
‘Buy Now Pay Later - Fixed Term’	Fixed term 'Buy Now Pay Later' commitments - where a repayment term is available
‘Buy Now Pay Later - Revolving Term’	Revolving 'Buy Now Pay Later' commitments -where a repayment term is not available
CAL	Credit Approval Limit - The maximum aggregate exposure an officer can approve for a customer group. Refer Credit Approval Limits
Capitalised Loan Amount	Is the loan amount including LMI premium capitalisation. Refer Mortgage Insurance .
Capitalised LVR	Is the LVR including LMI premium capitalisation. Refer Mortgage Insurance.
Cash out	'Cash out' is where existing funds are fully or partly released directly to the customer for an acceptable purpose as listed in the Eligibility policy, e.g. the purchase of a property or debt refinance where the Bank will control the release of loan proceeds to complete the purchase or refinance is not considered 'cash out'.
Caveat	A notice of warning given to a public authority, e.g. Titles Office, claiming entitlement to an interest in certain land. The caveat is registered and remains on the books as a warning to anyone who contemplates dealing with the property. It therefore prevents any action being taken without the previous notice of the person entering the caveat (the caveator).
Caveatee	Is the registered owner of the property, which is the subject of the caveat.
Caveator	Party lodging a caveat, e.g. Westpac Group.
CCR	Comprehensive Credit Report Various Credit Reporting Agencies (E.g. Equifax) provide a report on loan applicants which details information on credit facilities, such as financial hardship information, repayment history (both positive and negative), limits, open and closed credit dates, and credit enquiries.
CDE	Customer Declared Living Expenses - All fixed and variable living expenses not including commitments. Refer Living Expenses
CEMV	Customers Estimated Market Value -The estimated dollar value the customer provides us of their residential real estate property.
Centrelink debt	A formal payment arrangement to repay a benefit overpayment, advance or loan with agreed instalments over an agreed period, usually where the applicant is no longer in receipt of payments from Centrelink. The Centrelink debt is being repaid via a deduction to an account. For further information refer to: Commitments policy > customer commitments > Centrelink debt; and Serviceability assessment policy > Serviceability repayment amount > Centrelink debt. Does not include scenarios where the overpayment, advance or loan is being repaid via a reduction to the ongoing Centrelink Income amount. In these scenarios, the reduced income amount is used in the serviceability assessment, where acceptable. Refer to Verifying income policy > Supplementary income > social security income.
Certificate of Occupancy	Issued upon satisfactory final inspection by the A.C.T. Building Controller, confirming that construction has been in accordance with the approved plans and to Australian Building Control Standards.
Charge (over property)	The term used to describe any right established over a borrower's property to secure a debt or performance of an obligation.
Chargor	The owner of property who gives the Bank a Charge to secure its debt
Collateral	Real estate property. Refer also to 'Asset collateral', 'Existing security collateral', 'New security collateral'
Commercial and industrial property (non-specialised)	Comprises of properties with the following features Properties zoned for general commercial and/or industrial use Refer LVR > Rules > Unacceptable Securities
Commercial and industrial property (specialised)	Properties that cannot be easily converted to other uses and that have a specific licence attached which is integral to its value (e.g. squash courts, hotels, bottle shops, caravan parks, specialised factories, service stations, theme parks, hospitals and nursing homes). Refer LVR > Rules > Unacceptable Securities
Commitments	For the purposes of our policy a Commitment is defined as a debt, liability or facility which may be secured or unsecured and also includes outgoing rent, board, child support payments (maintenance) and alimony. (Excludes living expenses) Refer Commitments
Common Law System of land	Refer Old System Title
Community title	Title issued for each lot of land that has been divided into at least two lots and has common property (land that is shared within the community scheme such as the service infrastructure and driveways). The owner is responsible for the maintenance and insurance of any structures on their own lot, and has no obligation for maintenance of other lot owner's buildings (unlike strata title)
Company	An incorporated body as recognised by ASIC (i.e. Smith Pty Ltd). A company has a separate legal existence from its owners. The company's owners are known as members or shareholders. Companies are managed by directors and secretaries.
Company title	The company title owner does not have title in any real estate, but has, by virtue of the ownership of shares in the company, the right to occupy a particular apartment in the building owned by the company. The share certificate and ownership of the shares allows that person to live in the unit. Unlike strata title, the buyer of a company title home unit will not receive a certificate of title to the property.
Completed residential dwelling	A completed residential dwelling is a property which is not currently under construction. It may be a long term established property, or newly completed and never previously occupied.
Construction Loan	A construction loan is a specialised lending option that will assist a borrower and their builder through the process of building or renovating a property. Refer to Qualifying Development Cost
Construction valuation	Refer to TBE valuation
Contingent liability	An amount not yet payable but which may become payable should a future defined event occur.
COS	Contract of Sale - Signed agreement to purchase a particular property. Refer Security Collateral Value > Process > Contract of Sale
Conversions to residential from other usage	Non-residential properties (warehouses, hotels or motels, commercial offices etc.) that are converted for residential use are often smaller than normal strata units or have unique features. Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Conveyance	The document or deed by which an interest in property is conveyed (transferred) by one person to another.
Cost Plus Contract	There is no guaranteed final cost for the build. Often this contract is used where the project's nature prevents the final cost from being calculated. The consumer repays the builder for verified direct and indirect costs and fees at regular intervals. There is usually a percentage added on top of the cost paid to builder (i.e. Cost PLUS 10%). Refer to Qualifying Development Cost
Corporation	A body or group, which has in law and in existence, rights and duties distinct from those who form it.
Covenant	An agreement creating an obligation contained in a security document. A promise within a deed or similar document, (it may be positive, negative or restrictive).
Crown Lands System of Title	Crown Land is land belonging to the government. Titles may vary, e.g. occupational licences, leases for a specified period and perpetual leases. Most crown land is outside the metropolitan area.
Currently tenanted	The rental property is tenanted at the time of income verification and will continue to be tenanted after loan funding.
Debt Consolidation	Two or more debts being refinanced. Refer definition for Refinance.
Debtor	Someone who owes money to another and can be compelled to perform an obligation.
Deed	A document in writing, which is signed, sealed and delivered by the parties thereto, to prove and testify the agreement of the parties whose deed it is, to the things contained in the deed.
Demolition of an already established dwelling	The reduction of living space in an existing floor plan through the demolition of part or the whole of the already established dwelling. May be undertaken to facilitate additions to a dwelling. Refer to Qualifying Development Cost
Deposited plan	A plan of division of land registered with the Land Titles Office. A Deposited plan is generally divided into a number of 'lots', each identified by a lot number.
Desktop Valuation	A 'Desktop' valuation is a report completed by a valuer using a range of property specific data and imagery supplied by a data company which, coupled with the valuer's local knowledge and expertise, allows the valuation report to be completed at the valuer's desktop in lieu of having to undertake a physical inspection of the property. Refer Security Collateral Value > Rules > Desktop Valuation
Discharge	To release an entity from an obligation. A Discharge of Mortgage is a document prepared and executed by the mortgagee to permit the removal of a specific mortgage from the Certificate of Title once the debt has been fully repaid. A mortgagee retains its right/s to the personal covenants contained in the mortgage in the event that the amount repaid is insufficient.
Display homes	A home that has a contract of sale involving sale and leaseback (rental agreement) arrangement to the developer. The specialised nature of the property limits resale opportunities. Refer Acceptable Security Collateral
Disposable income	Remaining income available to service a loan after deduction of tax, living expenses and existing/continuing loan commitments.
Distress	An entity taking possession of another's property to compel payment of a debt.
Document of title	A Bank term for items, which prove ownership of property e.g. Certificate of Title, Life Policy or Share Scrip etc.
DRA	Delegated Risk Authority
DUA2	Delegated Underwriting Authority (Level 2) - Mortgage Insurance approval code input by Credit Managers when approving mortgage insurance
DUAG	Delegated Underwriting Authority (Level G) - Mortgage Insurance approval code input by onsite underwriters when approving mortgage insurance (ALMI)
EAL	Equity Access Loan
Easement	Generally restricts construction e.g. right of way, drainage easement. If building works are to occur, easements must be checked to confirm or obtain permission.
Encumbrance	A charge or liability, e.g. a mortgage.
Encumbrancer	The registered proprietor of the land over which the encumbrance has been lodged.
EMV	Estimated Market Value
Entity	A natural person, company, or group of persons who conduct business with the Bank. See Corporation.
Equity	Generally used to denote the financial interest of a person in a property or business enterprise, e.g. a person's equity in their house is the difference between its value and the amount still owed to a creditor. A person's overall equity refers to their net financial worth, or the difference between what they own and what they owe i.e. Assets - Liabilities = Equity.
Estate	An interest in land
Execution	The signing of security documents by the parties involved in giving the security, in the presence of witnesses. A company will usually execute by affixing its seal (if the company has a seal), in the presence of certain officers in the company.
Existing security collateral	Is defined as real estate property over which the Bank already holds a mortgage from the borrowers.
EVD	Existing Valuation Dated - A valuation that is stored in the bank system that was previously performed for another customer and/or brand. An existing valuation can be reused for the same security address, subject to meeting policy requirements. Refer Security Collateral Value > Rules > Re-using an Existing Valuation
Fast Track	Self-employed application processed using income from Notice of Assessments only. i.e. No add backs used.
FHOG	First Home Owners Grant
Firm	A business partnership - not incorporated
Fixed and Floating Charge	A charge over the assets of a company incorporated under the Corporations Law. Also known as a Mortgage Debenture.
Fixed Price Contract	The builder or tradesperson agrees upfront to a fixed amount for the whole job. Customer requested changes during construction may affect the final cost. For example upgrades or down-grades to PC items or increases to the cost of footings. Refer to Qualifying Development Cost
Flexible Payment Option (FPO)	A facility option normally attached to a Charge card (e.g. Amex, Diners and some retail store cards) which traditionally would require the card to be cleared in full each month and has no pre-determined Credit or Spending Limit. This Option allows a customer to repay a portion of the balance, to a predetermined limit (FPO Limit), in instalments similar at that of a normal credit card facility, with the remaining balance above the FPO limit to be cleared in full monthly .
Flood prone areas	Generally, properties that are located in a floodway or direct current are not acceptable as security collateral. Proposals will be considered provided the conditions are met. Refer Acceptable Security Collateral > Rules > Assessing security collateral impacted by Geographical or Environmental issues
Floor Rate	The lowest benchmark rate that the Bank has set for testing a customer's ability to repay the loan. Refer Serviceability Assessment
FSV	Financial Situation Verification
Full Application	An application type which seeks 'Formal Approval' (Unconditional Approval)
Full time	Employment type Usually 32 hours or more of work per week work is regular and ongoing
Fully drawn / funded	A loan in which the amount approved has been fully advanced.
Gearing	The total amount of debt compared to total assets. Normally expressed as a percentage and is a good indicator of an applicant's ability to accumulate assets. The lower the percentage the better.
GEMI/GEMICO	GE Mortgage Insurance (formerly HLIC)
Guarantee	A contractual promise given by a third party, i.e. The guarantor agrees to have a liability to pay for the loan if the customers are unable or unwilling to repay the loan.
Guarantor	An entity that agrees to be responsible for the obligations of another.
HECS	Higher Education Contribution Scheme (replaced by HELP) See Study and Training Support Loans
HELP	Higher Education Loan Programme See Study and Training Support Loans
HEM	Household Expenditure Measure. An index produced by the Melbourne Institute and used by the Bank to set the minimum surplus rule for serviceability.
HLEM	Housing Loan Enquiry Module - Housing loan simulator to assist you determine borrowing capacity of applicant and repayment, term etc. for various loan products/scenarios.
HLIC	Housing Loan Insurance Corporation - see GEMI/GEMICO
HomeBuilder Grant	Federal Government grant to assist customers in constructing a new build (Grant Ended 31/3/2021)
Hotel rental	See Rental income received on a short term basis
Household	Household is defined as a maximum of two adults living together at the same address who are in a married /defacto relationship, and includes their dependants as per policy definition
Indemnify	Make good a loss that one entity has suffered as a consequence of an act of default by another
Indemnity	Security against damage or loss; sum paid in compensation for loss incurred
Individual/natural person	A private or natural person as distinguished from a partnership, firm, company, corporation or association.
Interest	A person has an interest in a thing when they have rights, titles, advantages, duties or liabilities connected with it.
IPA	In Principle Approval. An application type which seeks 'Conditional Approval' only. In order to progress to a 'Formal Approval' (Unconditional Approval), the application must be submitted and assessed as a 'Full Application'
Joint and severally liable	The Bank's joint account authorities, guarantee forms, etc are framed to ensure that joint account holders with debts due to the Bank or joint guarantors liable to the Bank shall be severally liable, (i.e. individually), as well as jointly. With joint and several liability, a creditor has as many rights of action as there are debtors - the creditor can sue them jointly or severally until payment is obtained, and an unsatisfied judgement against one debtor will not be a bar to an action against the others.
Joint tenancy	Indivisible, concurrent ownership of land, or any other asset, by two or more persons, where upon the death of one of the joint tenants, the surviving joint tenant/s is automatically entitled to legal ownership of the interest in the land or asset of the deceased joint tenant. The ownership of joint tenants is not stated in a specific share or portion as they each are held to own, at law, 'half of all and half of nothing'. There is no restriction on the number of joint tenants.
Kit Homes	A dwelling that is wholly or partially constructed offsite (i.e. in manufacturer's premises to a specific stage) then delivered to borrower's land for affixing to the borrower's land. Alternatively, all building materials necessary to construct the home are delivered to the borrower's land for constructing on site. Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
LAE	Lending against existing - Security Collateral
Land slip area	Property located in landslides area. Refer Acceptable Security Collateral > Rules > Assessing security collateral impacted by Geographical or Environmental issues
Land Tax	State Government imposed tax on land. Exemptions to land tax apply to owner occupied land (principal place of residence), land used for primary production and land held by a landowner which is not the principal place of residence but the land value does not exceed a pre-determined amount. Most land tax liabilities will apply to investment properties after the cumulative value threshold (as set by the government) is exceeded.
Lease (Finance)	A finance lease is often used to lease a vehicle for personal or business purposes. These leases usually are only made up of a finance amount however they may include operating costs as well. Effectively a leasing company buys an asset for the user and receives payment from the user for their exclusive use.
Lease (Novated)	A novated lease is similar to a financial lease with the addition of an agreement with the applicant's employer. Payments on the lease may include operating costs. Payments are made directly from the employee's salary and may include pre-tax and post-tax deductions.
Lenders Mortgage Insurance (LMI)	Lender's Mortgage Insurance (LMI) : is a once-only premium payable by the borrower when the LVR is greater than a specified threshold is a contract between the Bank and the Mortgage Insurer which protects the Bank against loss should the security collateral be sold at due to borrower default and there is a shortfall in the sale proceeds does not provide any protection for the borrower the policy is a contract between the Bank and the Mortgage Insurer LMI is not to be confused with Life Insurance, Mortgage Protection Insurance or Property Insurance.
Liability	A debt for which one is liable; being responsible only to a limited amount.
Licensed Builder	A Licensed Builder is a person/company who has met the requirements of their State builders licensing authority. They are permitted to carry out work in the home building and / or construction sector for third parties. Refer to: Construction Loans Qualifying Development Cost
Limited title	A warning placed on a title under the Torrens Title system advising that the boundaries of the property described are not conclusive and therefore not guaranteed by the Land Titles Office. In order to remove the limitation, a plan of survey defining the boundaries must be lodged with the Land Titles Office. This limitation generally appears on titles that have been converted from the Old System Title of land to Torrens Title by the Land Titles Office. Solicitors acting on the conveyance will generally treat these as 'Old System' conveyances when checking title.
Linked Credit Arrangement	Referral of customers to the Bank by third party suppliers of goods or services for credit to purchase those goods or services will create a linked credit arrangement. The link is by arrangement or understanding between Westpac Group and the supplier. Arrangements can be verbal, implied or in writing.
Living Expenses	Discretionary living expenses as advised by the loan applicants.
Loan to Lending Value	The Loan Lending Value (LLV) is the maximum loan amount we can provide against the offered residential security property collateral calculated by multiplying the Security Collateral Value by the assigned Loan to Value Ratio
LLVR	Loan to Lending Value Ratio. The ratio of secured debt to the lending value based on the maximum LVR allowable.
LMI	Lender's Mortgage Insurance
Loan advance	Drawing part or all of the approved loan amount
Loan agreement	For the purposes of Consumer Lending this is made up of the Loan Offer (details form) and the General Terms & Conditions for a loan
Loan offer	Specifies the details of an individual loan such as loan amount, annual percentage rate, repayments, and the disclosures for the fees & charges on that loan, together with any special conditions for that loan.
LVR	Lending Value Ratio -The percentage value of the loan amount compared to the security collateral value. Refer Loan to Value Ratio (LVR)
Maturity	The date financial obligations under a loan agreement become due.
Migrant	A person who has been approved under one of the Australian Government temporary or permanent working VISA classifications for entry into Australia. Refer to Lending to Non-Australian Citizens
Market value	The estimated amount which a seller would expect to receive from an informed purchaser for the property in the current resale market with normal marketing support through an Australian based real estate agency. The market value is determined on a vacant possession basis and is to be exclusive of purchase incentives, non-fixed chattels, legal / stamp duty costs and rental guarantees.' A market value assessed on this basis will not reflect the mortgagee in possession or other forced sale circumstances.
Mine subsidence	When material is mined from underground, the land above can alter and shift, which can impact buildings and other structures. The various movements of the surface and subsurface are known as mine subsidence. Each situation of mine subsidence is different and needs to be assessed according to the local conditions. Refer Acceptable Security Collateral > Rules > Assessing security collateral impacted by Geographical or Environmental issues
Mixed residential and commercial property	Properties that have an occupied residence attached to a commercial premise (e.g. shop-front with a residence above or at the rear). Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Mortgage	A charge over real property, chattels, share scrip, ship etc as security for repayment of a debt.
Mortgagee	Name of financial institution or person making a loan who takes security over a property e.g. Westpac Group.
Mortgagor	The owner of property who gives a mortgage to the Bank to secure a debt
Mortgage debenture	Refer Fixed and Floating Charge
Mr Fluffy ACT & NSW asbestos affected homes	Homes identified by the ACT and NSW Governments as affected by loose fill asbestos and 'tagged' with warning stickers to meter boxes and switch boards. Refer Acceptable Security Collateral> Rules > ACT and NSW Asbestos Affected Homes (Mr Fluffy)
MV	Market Value
Narrative (may also be known as a transaction or payment description)	A transaction narrative is used to identify important information relating to credit or debit transactions on an account statement or account transaction listing, e.g. who the payment is to or from, reason for the payment etc. In some cases, the transaction narratives may be restricted by character count, where this occurs the narrative may only contain a partial description of the transaction. Where a single supporting document is used for verification, the transaction narrative must contain sufficient detail to clearly identify the transaction. Example of an acceptable narrative where a single supporting document is used, may include, but is not limited to: Where verifying base salary credits to an account, the employer’s name in the narrative may appear partially or in full. To be acceptable the transaction narrative must be sufficient to be able to link the payment to the employer’s name entered in the loan application Where a document(s) is used in combination with another document(s), a simpler narrative may be acceptable and must adhere to any requirements detailed in the specific policy. Example of an acceptable narrative where documents are used in combination may include, but is not limited to: Where verifying income from a payslip and the supplied document is missing the ‘Period the payslip covers’ (e.g., weekly fortnightly, monthly), an internal system extract (account transaction listing) confirms the applicant is paid weekly. The account transaction listing may have a simplified transaction narrative of ‘wages’ .
NDIS	National Disability Insurance Scheme
New security collateral	Is defined as real estate property in which the Bank does not currently hold as security collateral but offered by the borrower as security collateral to secure a mortgage.
NRAS	National Rental Affordability Scheme - A government backed incentive scheme that seeks to address the shortage of affordable rental housing by offering financial incentives to the business sector and community organisations to build and rent dwellings to low and moderate income households at lower levels compared to market rates. NRAS aims to increase the supply of new rental dwellings and improve rental affordability. There are two distinct NRAS structures: Head leases Some schemes operate on a head-lease structure where the scheme operator leases the property from the investor for a 10-year period and in turn sub-leases it to a qualifying tenant. Under this structure the investor has little or no control over the selection of tenants or the selection of the property manager (with the scheme operator generally taking care of both). Non-entity joint ventures (NEJV) Other schemes provide for the investor to select their own property manager and in turn enter into direct residential tenancy agreements with their tenants (and involve themselves in tenant selection). Refer Lending Value Ratio (LVR) > Rules > Assessing LVR by Security Type Refer Acceptable Security Collateral
NOA	Notice of Assessment - provided by the Australian Tax Office (ATO) summarising an individual's taxable income.
Non-Resident	A person who does not hold an Australian Citizenship or Australian Permanent Residency visa or a person who holds an Australian Temporary visa however does not ordinarily reside in Australia. Refer to Lending to Non-Australian Citizens > Non-Resident Lending
Non-Trading Entity	An entity that is 'Non-trading' is not involved in any production activity or sale of goods and services; there is an absence of creditors, debtors or stock on the balance sheet. Income will typically be derived from passive investments. Passive income will typically include rent, dividends or interest.
Not currently tenanted	The rental property is not tenanted at the time of income verification but will be tenanted after loan approval.
OBP	One Bank Platform
Off-the-plan strata/unit purchase	The customer enters into a contract to purchase a property before or during the construction phase of the development. In general, the customer has only sighted the plans for the development not the finished property.
Old System Title	Also called 'Common Law System Title'. Evidence of ownership of land is recorded on individual deeds that establish a chain of title. Copies of these deeds are lodged at the Land Titles Office. Accurate and correct ownership of a property under Old System Title can only be determined if the chain of title is unbroken.
Open Policy	Refers to LMI Policy. If the application meets certain set criteria as set by ALMI then mortgage insurance can be approved without referral to the mortgage insurers.
Over 55s developments	Residential properties held under clear title in designated communities where age restrictions (generally greater than 55 years old) must be met in order for individuals to own and live in the property. These properties are not a retirement village as defined by the Retirement Villages Act 1999 nor are they any residential facility that provides assisted living in the form of nursing care, meal support or housekeeping. Refer Lending Value Ratio (LVR) > Rules > Assessing LVR by Security Type
Owner Builder	An owner-builder is anyone who takes on the responsibility of managing their own residential building project. This includes: Coordinating and contracting roles usually undertaken by an architect or builder. Where any portion of the construction is carried out by the owner. Refer to Qualifying Development Cost
PAP	Premier Advantage Package
Part time	Employment type Usually less than 32 hours of work per week Work is regular and ongoing. The weekly hours worked would vary little or not at all.
PAYG Applicant	Pay as you go - used to describe applicants who work for an employer and are salary and wage earners and describes the method of paying tax.
Peak Debt	Peak debt is the total outstanding loan amount that may result for a Bridging (Relocation) loan, where the interest is capitalised over the full term of that facility. For a new Bridging (Relocation) loan OBP will determine the peak debt, which will be based on the bridging loan amount plus interest over the full (maximum) loan term of 12 months. The interest rate used in the peak debt calculation is the standard owner occupier (O/O) interest only (IO) variable interest rate plus a 1% buffer. No package discounts are applied to the IO variable interest rate.
Portable/ relocatable dwellings	A dwelling transported to a site and not permanently affixed in place, even if connected to services such as mobile homes converted to permanent or semi-permanent residences located in holiday parks or workers camps, temporary movable farm accommodations, caravans, caravan park allotments and converted buses. Refer Loan to Value Ratio (LVR) > Assessing Unacceptable Securities
Power of Attorney	A written authorisation to another person, or persons, to perform certain acts for the signer
Practical Completion	A term commonly used in the construction industry to indicate that the work has been done according to the contract and the building is suitable for occupation or use.
Predominant Purpose	The predominant purpose of a loan is the purpose for which the majority of the loan funds will be used for. Refer to Eligibility
Private School	A private school is defined as an independent school which is funded by a combination of parental contribution and federal and state government funding. This includes independent non-denominational schools as well as religious schools, e.g. Catholic schools.
Progress Payment	The construction loan amount will be paid out progressively when requested by builder as progress payments.
Purchased Leave	Some employers offer their employees the ability to take additional leave above standard entitlements. Instead of taking the additional leave as unpaid, purchased leave allows the employee to receive a wage during the additional leave period. This is achieved by the employee receiving a reduced wage over the non leave period, via a salary sacrifice.
Purchase price	An amount quoted in a contract of sale, may be used to determine the security value where we have excluded the value/cost of chattels (furnishings) and any rebates or incentives offered by the vendor
Put or Call	A ‘put’ or ‘call’ option is a method that can be used in a contract of sale to reflect an agreement to sell or purchase the property for a particular price at a future point in time or on the occurrence of an event. The ‘put’ or ‘call’ option operates to provide both parties with the right (but not the obligation) to compel the other party to buy or sell the property, as follows: If a buyer exercises their ‘put’ option, this allows them to compel the vendor to sell, If a vendor exercises their ‘call’ option, this allows them to compel the buyer to purchase, or If there is ‘no exercise’ of the put or call option, then neither party exercises their option and the agreement comes to an end.
Qualified title	Warning placed on a certificate of title of a property, which means that the particulars set out as to ownership and interests in the property are not guaranteed by the Land Titles Office Will generally appear on titles recently converted from Old System to Real Property Act titles by the Land Titles Office. Solicitors will generally treat these as for Old Systems Titles. See also "Limited Title"
Qualifying Development Costs	The value of the security collateral being ‘constructed’, as used in the LVR calculation for a Construction Loan . Refer to ‘ Loan to Value Ratio > LVR calculation’
RA Valuation	A Restricted Assessment (RA) (also known as kerbside inspection) is a qualified opinion by a panel valuer of the market value range of a property based on an external inspection (kerbside) of the property. The valuer does not enter the property's boundaries. The valuer provides an indicative market range for a similar property in the same locality as the security collateral being valued. Refer Security Collateral Value
RAP	Risk Assessment Platform
Refinance	The partial or full repayment of an existing secured or unsecured debt using loan funds. The facility may be closed (clearing debt) or may remain in place (reducing debt). The debt may be internal or external. Refinance can be facilitated via a new loan or an increase to an existing loan Note: A refinance may also be considered a 'Debt Consolidation'. Refer definition for Debt Consolidation
Registered proprietor	Person or corporation who is registered at the Land Titles Office as proprietor (owner) of a particular property. There can be more than one registered proprietor of a property. Only a registered proprietor of a property can give a valid mortgage over the property to a mortgagee.
Regulated loan	A loan regulated under the National Credit Code WBC
Renovations to an already established dwelling	Improvements made to an already established dwelling that may include, but are not limited to, updating internal fixtures and fittings (e.g. new bathroom or kitchen). Does not include any change(s) to an existing floor plan, full or partial demolition , or the construction of an attached or standalone dwelling on the title, e.g. granny flat Refer to Qualifying Development Cost
Rental income received on a long term basis	Property is self-contained and is rented out to a single tenant or group of tenants usually on a vacant possession basis. Leases may be between 6 months and 24 months in length and give the tenant/s right to occupy the whole of the premises. Note: For the purpose of rental income, a granny flat is considered the “whole premises” when it is a fully self-contained separate area of occupancy with a minimum of 1 conventional bedroom (not a studio / partitioned space) with full living facilities including standard kitchen, bathroom facilities and direct independent access. The property is not rented on a room by room basis or a room within an owner occupied dwelling
Rental income received on a short term basis	The property is typically tenanted for says of less than 6 months at a time (except for student accommodation) where the occupant has sole / exclusive use of the whole property. A property rented on a short term basis may be a: Standard investment property rented on a holiday basis (e.g. rented through Airbnb or Stays) Serviced apartment, Hotel / Motel or holiday accommodation Student accommodation Self contained granny flat Note: For the purpose of rental income, a granny flat is considered the “whole premises” when it is a fully self-contained separate area of occupancy with a minimum of 1 conventional bedroom (not a studio / partitioned space) with full living facilities including standard kitchen, bathroom facilities and direct independent access. The property is not rented on a room by room basis or a room within an owner occupied dwelling
Renter	Someone who rents a property from a landlord and has exclusive right to the rented property during a lease term. There is usually a written tenancy agreement signed by both the landlord and the tenant.
Residential Long Form Valuation	Residential Long Form Valuation Report is also known as a comprehensive valuation report. A full length, detailed report. A Residential Long Form valuation report is not in a standard format. Refer Security Collateral Value > Rules > Default Residential Long Form Valuation Scenarios
Residential dwelling to be erected (e.g. by licensed builder or owner builder)	Construction of a standalone dwelling or duplex, structural renovations to an existing property or multi-unit residential developments. Refer Acceptable Security Collateral > Rules you must apply > Identifying Standard Real Estate Security Collateral Refer to Qualifying Development Cost
Residential Short Form Valuation	A residential Short Form valuation report (also known as Property Pro report), is an industry based standard 2 to 3 page (usually) valuation report for use on an average residential property. Refer Security Collateral Value > Rules > Default Residential Short Form Valuation Scenarios In most instances where a valuation report is required, valuers will prepare a standard valuation (Short Form report).
Resort rental	See Rental income received on a short term basis
Retired	Employment type Having left one's job and ceased to be working All or majority of income is derived from pensions (including aged and service pensions from Government sources), investments and / or annuities.
Retirement village accommodation	Retirement villages are designed for people aged over 55 years or older or are retired from full-time employment (or are spouses/partners of such people). Such residents receive accommodation and services, other than services provided in a residential care or aged care facility. Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Reverse Mortgage	A reverse mortgage is designed for people aged over 60 years or older using the equity in your Owner Occupied property as security, to advance funds. The borrower is not required to make repayments, interest and fees compound and add to the principal amount borrowed. Normally the loan is repaid in full when the borrower (or deceased estate) sells the security.
Rural property (non-specialised)	Income-producing properties used for rural/primary production activities such as grazing of stock common for the area and cropping of standard broad acre and horticultural crops. They may also be non-income producing hobby farms with a land area in excess of 8 hectares that do not meet the requirements of 'residential real estate'. Refer Acceptable Security Collateral > Rules > Assessing Unacceptable Security Collateral
Rural property (specialised)	Properties restricted to primary production use or a use that cannot be readily adapted to alternative uses and retain their current market value in the process (e.g. intensive poultry, intensive piggeries and boutique ventures such as emu or alpaca grazing). Other specialised rural properties may contain water allocation rights or licence. These rights can influence and inflate a purchase price. They can also be sold or traded separately to the security property itself. These properties are normally found adjoining major river systems. Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
S.C.A.T.T.	Solicitor's Certificate as to Title and Undertaking - which is the certification given by the Bank's solicitor or Mortgage Preparer that all appropriate enquiries in relation to the proposed security have been satisfied, all appropriate documentation has been executed by the borrowers/mortgagors, and that funds are to be released in preparation for settlement. In addition the solicitor also undertakes to complete the matter in a timely fashion including the lodgement of documents for registration and return to the Bank.
SDA	Specialist Disability Accommodation
Search	The examination of records and registers at offices of public record (e.g.. Lands Titles Office, Australian Securities and Investment Commission) to determine ownership, encumbrances and information (such as registered mortgages and charges) that are essential to effectively determine the Bank's security position, secure and settle advances.
Security Collateral Value	Refers to the value of the property offered as security collateral determined in accordance with the valuation methods defined in this policy and is used in the calculation of loan to value ratio (LVR). The Security Collateral Value may be based on: Contract of sale (purchase price) Validated customer estimated market value An acceptable Valuation
Serviceability Repayment Amount	The repayment amount which is ultimately used within the serviceability assessment
Serviceability Assessment Rate (SAR)	The interest rate which is applied within the calculation of the monthly payment/commitment used for serviceability Refer Serviceability Assessment
Serviced apartment	A fully furnished apartment available for short-term stays that provides hotel-like amenities, such as room service, a fitness centre and shared laundry. Most are equipped with full kitchens, Wi-Fi and internal washer and dryers. Refer to Rental income received on a short term basis and Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Servicing capacity	See Disposable Income
Settlement	The purchaser of a property hands over the balance of purchase price in exchange for the title documents and keys. Also called 'completion'. Settlement of the loan funds will not necessarily coincide with the settlement of the purchase.
SFSS	Student Financial Supplement Scheme See Study and Training Support Loans
SGB	St George Bank
SMSF	Self-managed Super Fund
Snow leases	Properties located in the Snowfields with ownership held under a lease/head lease structure. Example: Located in Kosciusko National Park subject to a head lease from the National Parks and Wildlife Service and Kosciusko Thredbo Pty Ltd. Refer to Rental income received on a short term basis and Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Social Security Recipient	Employment type In receipt of a Government Income support payment (e.g. age pension, Family tax benefit)
Split contracts (multi-unit residential developments	Split contract for a multi-unit residential developments, generally a developer is seeking to sell and settle the land prior to construction of the houses/townhouses/units occurring. Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Split contracts (single residential property constructions)	Single, stand-alone residential property constructions with no common roadways, common access ways and in particular common walls or slab, even where there is a split contract involved (such as a standard house and land package). Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
SRO	State Revenue Office
Stamp duty	Form of tax charged by state government on certain documents or transactions e.g. contract of sale, mortgage, share transfers, leases etc. The rate at which duty is payable will depend on the state, and type of instrument/document.
Spousal	Married or de facto relationship
SSL	Student Start-up Loan See Study and Training Support Loans
Strata title	Home units divided into lots. These lots form the strata plan for that building. The owners of a unit own a lot in the Strata Plan. The Strata Plan is managed by the Body Corporate. A separate Certificate of Title is issued by the Land Titles Office in respect of each individual home unit. There is also a Certificate of Title in relation to the common property (e.g. stairs) but should never be mortgaged by the Body Corporate.
Stratum title	Stratum title pre-dates modern strata title subdivisions. Under stratum title, the property is subdivided into lots. Each unit owner is the registered proprietor of their lot and also holds shares in a service company established under the Corporations Act 2001. The service company owns and manages common property.
Structural renovation or extensions	As a guide structural renovations include additional rooms, or new floors being added, or other significant changes to a dwellings structure. Excluded are cosmetic changes such as internal/external painting, bathroom/kitchen renovations, pools, landscaping.
Student	Employment type Principally involved in academic study with little or no income
Student accommodation	Similar to any residential dwelling where property are mainly rented to students as temporary accommodation. A dormitory (dorm) or boarding house that provides sleeping and residential quarters for large numbers of students in school, college or university are not acceptable form of student accommodation to the bank. Refer to Rental income received on a short term basis and Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Study and Training Support Loans	Government financial assistance loans for people undertaking higher education, trade apprenticeships and other training programs. HECS/HELP/VSL/SFSS/SSL/ABSTUDY SSL/TSL Refer Serviceability Assessment
Substitution of security	A loan variation activity which allows the security on an existing loan to be changed while the loans remains open . Also known in WBC as a 'Portability'
Superannuation Guarantee Charge (SGC)	Contributions into Super are made by employer and must be equal or greater than to 9.5% of your 'ordinary time earnings'. The ATO defines 'ordinary earnings' as what an employee earns for ordinary hours of work. It includes things like commissions and allowance but not overtime. Where an employee salary sacrifices for any reason the employer can apply the SGC to the total ordinary earnings or the total ordinary earnings after the salary sacrifice.
Supported Guarantee	The guarantors security is used to support the loan application i.e. the applicant should be able to service the proposed loan commitments however requires assistance from a guarantor to provide additional security. A guarantee is required for each mortgagor who is not a borrower for a particular facility.
Surety	Person who makes themselves responsible for another's payment of debt; also known as the guarantor.
Survey	Diagrammatical representation & report from a qualified surveyor, showing the boundaries of a specific property and any existing or proposed improvements. The report attached to the diagram indicates whether the building complies with local government ordinances e.g. distance of exterior walls to boundaries. The report may also state whether there are any encroachments from buildings or fencing on or by adjoining properties.
TAE	Total Approved Exposure - applicant's borrowing exposure to the Bank covers all liabilities including unsecured loans and credit cards
Tax Bill	An amount payable to the Taxation Office for previous year/s tax which is not yet due as at full application date. e.g. $4,000 payable for Notice of Assessment -year ended 30 June 2019. Payment due 26 November 2019 Full application date 5 November 2019
Tax Debt-Type A	A formal payment plan with the Taxation Office to pay previous year/s tax in agreed instalments over an agreed period of time. This does not include any arrangements to pre-pay tax expected to be payable for the current tax year, e.g. PAYG Instalments
Tax Debt-Type B	An amount payable to the Taxation Office for previous year/s tax which is overdue at full application date and no formal payment plan is in place with the Taxation Office. e.g. $4,000 payable for Notice of Assessment -year ended 30 June 2019. Payment due 26 November 2019 Full application date 5 December and $4,000 has not been paid
TBE Valuation	To be erected or 'as if complete' or 'on completion' valuation. May also be referred to as a ‘Construction’ valuation. The terms refer to a valuation being done on the basis of a property that is yet to be constructed or is not yet fully constructed. It can include existing dwellings where an extension is being added or renovations are being undertaken, vacant land where a stand-alone dwelling will be built or a multi-unit development. Refer to: Construction loans Qualifying Development Cost
T & C	Terms and Conditions letter
Temporary	Employment type Temporary employment is short term, of a seasonal nature or has a termination date
Tenants in common	A form of co-ownership in which the property is held in common with others. Tenants in common have fixed undivided shares in the property. Tenants in common can have unequal shares (for example, two-thirds to one and one-third to the other).
Tenants in Common title	Not to be confused with Tenants in Common above. (A forerunner of strata title and not very common). This is title given to home unit owners, where the right of occupation of a particular unit in a building, is given by the ownership of a share of the whole property registered with the Land Titles Office. Each home unit owner is issued with a certificate of title in their name. The owners are all a party to a Deed that governs the use of the common property.
Third party security	Security collateral offered by a person or persons not identical to the borrower (s) such as a company offering company directions or the security collateral is owned by two people but offered as collateral for a loan for only one of those people). Refer Guarantees .
Timeshare property	A form of ownership or right to use a particular property or properties, such as a holiday villa, apartment or cabin for a set period of time. Refer Acceptable Security Collateral > Assessing security Collateral requirements - Non-standard Development
Torrens title	System whereby ownership and all dealings on a property are detailed on the one document, i.e. A Certificate of Title or Deed of Grant. Under this system a mortgage is a charge or encumbrance on the title. Registration is compulsory to effect legal transfer of an interest in property, and each time the property is sold, mortgaged, or a mortgage discharged, the transaction is recorded on the Certificate of Title.
Trading entity	An entity that is 'Trading' is involved in a production activity (i.e. manufacturing or sales of goods or services). If creditors, debtors or stock are observed on the balance sheet, and/or if a measure of 'cost of goods sold' is observed on the profit and loss statement the entity is considered to be trading.
Transfer	A document transferring ownership of property under the Real Property Act e.g. in the case of a sale, the vendor signs this document to enable transfer of ownership to the purchaser at settlement. This document is liable for stamp duty, and is registered at the Land Titles Office.
Transportable homes	A dwelling transported to site and permanently affixed in place and connected to services (e.g. water, gas, electricity, sewerage) and cannot be moved again. Refer
Trust	A trust is an obligation imposed on a person or other entity to hold property for the benefit of the beneficiaries. The trustee is responsible for managing the trust's affairs. Common types of rusts are: Bare Trust: A trust where there is no trust deed. This type of trust commonly arises from a single transaction (e.g. used when a superannuation fund is purchasing a property) Discretionary Trust: The trustee has discretion as to how to distribute income and assets between beneficiaries. The beneficiaries are usually described by reference to a certain criteria. Generally, it is not possible to clearly identify all of the potential beneficiaries (e.g. a Family Trust) Unit Trust: The beneficiaries hold units in the trust and funds and assets can be distributed according to the unit holdings. The unit holders can be easily determined at any given time. Unit Trust can be listed or unlisted.
TSE	Total Secured Exposure - Is the total of all loan exposure against the (proposed) new and/or existing residential real estate security collateral(s).
TSL	Trade Support Loan See Study and Training Support Loans
UCCC	Uniform Consumer Credit Code.
Unemployed	Employment type Not currently employed but actively seeking employment and / or in receipt of unemployment benefits
Unit	Any property with a unit number or entitlement allocated including but not limited to: duplex, triplex, villa, strata title unit, townhouse, apartment, company title unit, community title unit, stratum title unit.
Unregulated loan	Any loan not covered by the definition of Regulated Loan
Unsupported Guarantee	The guarantor's income is used to support a loan application, i.e. the applicant has insufficient income to meet serviceability and the guarantor's income is sufficient to assist. Reliance on an unsupported guarantee is only acceptable from a married or defacto partner. Refer Guarantees .
Vacant land	Land void of any improvements (must be residential)
VSL	VET Student Loans See Study and Training Support Loans
WBC	Westpac Banking Corporation
WBG	Westpac Banking Group - incorporating Westpac, St George Bank Group and RAMs
WLMI	Westpac Lenders Mortgage Insurance
Zoning certificate	Certificates from the local government (i.e. council) stating the zoning of a property (e.g. residential, commercial, industrial) and whether proposed or existing council plans affect the property

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	22 May 2022	Added the following definitions Put or Call Reverse Mortgage Currently tenanted definition Not currently tenanted
4	17 July 2022	Change 1 The definition of peak debt has been updated to: Peak debt is the total outstanding loan amount that may result for a Bridging (Relocation) loan, where the interest is capitalised over the full term of that facility. For a new Bridging (Relocation) loan OBP will determine the peak debt which will be based on the bridging loan amount plus interest over the full (maximum) loan term of 12 months. The interest rate used in the peak debt calculation is the standard owner occupier (O/O) interest only (IO) variable interest rate plus a 1% buffer. No package discounts are applied to the IO variable interest rate. Change 2 Amended CCR definition: Comprehensive Credit Report Various Credit Reporting Agencies (E.g. Equifax) provide a report on loan applicants which details information on credit facilities, such as financial hardship information, repayment history (both positive and negative), limits, open and closed credit dates, and credit enquiries. Change 3 Added definitions for ‘Buy Now Pay Later- Fixed Term’ and ‘Buy Now Pay Later-Revolving Term’
5	2 October 2022	Change 1 Added new terms and definitions for the following: Hotel rental Rental income received on a long term basis Rental income received on a short term basis Resort rental Change 2 Amended content in definitions, due to chapter name changes: Migrant lending Old wording Refer Migrant Lending New wording Refer to Lending to Non-Australian Citizens Non-Resident Old wording Refer Non-Resident Lending New wording Refer to Lending to Non-Australian Citizens > Non-Resident Lending
6	20 November 2022	Change 1 Added new terms and definitions for the following: 1. Additions to an already established dwelling The addition of a further living area(s) to an already established dwelling. The changes may include: increasing living area(s) via new rooms or extra storey, and may involve full or partial demolition of the existing dwelling, or the construction of an attached or standalone dwelling on the title, e.g. granny flat, providing no more than 2 areas of occupancy on the title 2. Demolition of an already established dwelling The reduction of living space in an existing floor plan through the demolition of part or the whole of the already established dwelling. May be undertaken to facilitate additions to a dwelling 3. Renovations to an already established dwelling Improvements made to an already established dwelling that include, but are not limited to updating internal fixtures and fittings (e.g. new bathroom or kitchen). Does not include any change(s) to an existing floor plan, full or partial demolition, or the construction of an attached or standalone dwelling on the title, e.g. granny flat 4. Qualifying Development Costs ‘The value of the security collateral being ‘constructed’, as used in the LVR calculation for a Construction Loan. Refer to ‘ Loan to Value Ratio > LVR calculation’ Change 2 Added links to ‘Qualifying Development Costs’ against existing glossary definitions related to construction/building
7	20 November 2022	Links updated
8	19 February 2023	Change 1 Added new terms and definitions for: Centrelink debt Boarder Renter Change 2 Spelling correction from ‘AirBIB’ to ‘Airbnb’ Change 3 Update to “HomeBuilder Grant” to include (Note: Grant Ended 31/3/2021) Change 4 Added new definition for ‘Narrative’ A transaction narrative is used to identify important information relating to credit or debit transactions on an account statement or account transaction listing, e.g. who the payment is to or from, reason for the payment etc. In some cases, the transaction narratives may be restricted by character count, where this occurs the narrative may only contain a partial description of the transaction. Where a single supporting document is used for verification, the transaction narrative must contain sufficient detail to clearly identify the transaction. Example of an acceptable narrative where a single supporting document is used, may include, but is not limited to: Where verifying base salary credits to an account, the employer’s name in the narrative may appear partially or in full. To be acceptable the transaction narrative must be sufficient to be able to link the payment to the employer’s name entered in the loan application Where a document(s) is used in combination with another document(s), a simpler narrative may be acceptable and must adhere to any requirements detailed in the specific policy. Example of an acceptable narrative where documents are used in combination may include, but is not limited to: Where verifying income from a payslip and the supplied document is missing the ‘Period the payslip covers’ (e.g., weekly fortnightly, monthly), an internal system extract (account transaction listing) confirms the applicant is paid weekly. The account transaction listing may have a simplified transaction narrative of ‘wages’ .
9	2 July 2023	Change 1 Added new definition for Practical Completion (as per HIA definition)

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03.31 Lenders Mortgage Insurance

Policy ID

03.31

Policy Name

Lenders Mortgage Insurance

Policy Content

1. About this policy
1.1 Why this policy
2. Rules you must apply
2.1 Current and historical mortgage Insurers
2.2 Lenders Mortgage Insurance Premium
2.3 Lenders mortgage insurance approval
2.4 Existing insured loans - Variations and Top Up premiums
2.5 Requests for premium refunds
2.5.1 Refund Rates-Loans repaid in full
2.6 Premium rates and stamp duty
2.6.1 Premium Rates
2.6.2 Stamp Duty

1. About this policy

1.1 Why this policy

Purpose	Lender’s mortgage insurance : protects the Bank against loss in the event the borrower defaults which results in the sale of the security property, and there is a shortfall in the sale proceeds to cover the debt owing to the Bank. does not provide any protection for the borrower is required when the loan to security value ratio (LVR) exceeds the Non-MI maximum lending value ratio. Refer Loan to Value Ratio (LVR)
Applicable to	Consumer mortgage applications for: new loan loan increase variations to an existing mortgage insured loan where the mortgage insurer’s risk is increased or amended
Lender’s mortgage insurance cover	For construction loans, commences from the date of the first draw down (i.e. settlement for land) or the date of the initial loan establishment and / or drawdown and where payment of the LMI Premium is received. Will be for 100% of the principal, interest, legal and selling costs For all loans, LMI cover is valid for the duration of the loan contract or the expiration of the loan term (i.e. residential principal and interest loans, or residential Combination Loans) unless a variation to the contract’s terms and conditions are agreed to, which may necessitate an additional premium being payable. For Bridging loans the period of cover applies for the Bridging period and will continue on the end debt situation if LMI cover is still required.

2. Rules you must apply

2.1 Current and historical mortgage insurers

Feature	Insurer
For loans written on or after 01/09/2021	ALMI
For loans written before 01/09/2021:	Refer below
Equal to or less than 90% LVR ¹	WLMI
Greater than 90% LVR¹	For loans written on or after 18/5/15	WLMI
	For loans written between 12/11/12 and 17/5/15	QBE (Legacy LMI provider)
	For loans written prior to 12/11/12	Helia (formerly Genworth Financial) (Legacy LMI provider)
Also refer to ‘ Existing insured loans – Variations and Top Up premiums'
¹ Capitalised LVR is used when the premium has been capitalised ²SGB, BoM, BSA and RAMS are considered to be external providers

2.2 Lenders Mortgage Insurance Premium

Premium payable	A once only premium is payable by the customer, except where a Variation or Top Up to an existing mortgaged insured loan requires a new or additional premium to be paid Customers have the option to capitalise the LMI premium on top of the base loan amount. Refer to Premium rates and stamp duty
Premium refund	Refer to Premium Refunds

2.3 Lenders mortgage insurance approval

Restrictions	An LMI policy, approval or In Principle Approval (IPA) should not be issued until applicants have met acceptable minimum credit standards. Final approval is subject to the satisfactory completion of all verification activities required of the Broker, Assessor and the Mortgage Centre / Verification Teams A consumer mortgage application meeting LMI lending value ratio is not an indication of approval
ALMI Underwriting Standards	ALMI will underwrite mortgage insurance up to the following: $2,500,000 mortgage insured exposure to a single borrower across the Westpac Group $2,500,000 at an LVR of up to 95% in a single loan including capitalising of the LMI premium ALMI has its own set of acceptance criteria ‘ALMI Underwriting Policy’, based on the level of risk it is prepared to undertake. This criteria may vary from the Bank’s credit policy for acceptable risk.
Credit Rules -Loan amount and LVR	All Credit rules utilise the base loan amount and the base LVR, with the exception of serviceability assessments where repayments are based on the capitalised loan amount
LMI approval and authorities	ALMI operates a Delegated Underwriting Authority (DUA) in conjunction with authorised Credit employees, whereby Credit may issue LMI policies on behalf of ALMI, provided that certain criteria are met. Approval criteria is detailed within Consumer Credit Policy and the individuals DUA authority letters.
	LMI may be approved either:
	within LMI open policy (DUA1) by authorised WBC employees
	outside open policy:
	by authorised LMI DUA Holders (DUA2):	Applications referred outside the open policy should have a basis for consideration given higher LVR Lenders / Assessors need to provide mitigating factors, such as financial position, stability, income / servicing, existing customer history and / or security to warrant cover at the level sought
	by ALMI underwriters (DUA4), for loan applications outside of both open policy parameters and DUA2 approval levels	Credit must assess the credit worthiness of the application and if they consider the application worthwhile, recommend the loan to ALMI underwriters (DUA4) for consideration and approval.
Genuine savings, 10% equity, Customer contribution	New loans and loan increases requiring LMI must comply with the policy detailed under Genuine Savings, Equity and Customer Contribution.
Duty of disclosure	Duty of disclosure is owed to the insurer under the Insurance Contracts Act. It requires disclosure to the mortgage insurer of all matters known, or that could reasonably be expected to have been known, that are relevant to the Insurer’s decision as to whether to accept the risk of the Insurance, and if so, on what terms. This duty also extends to any subsequent renewal, variance or reinstatement of the LMI contract. Failure to comply with the duty of disclosure, may entitle the insurer to reduce its liability under the LMI contract in respect of a claim and or to cancel the contract. If the non-disclosure is dishonest (made knowingly), the insurer may also have the option of avoiding the contract. Also see Loan Application and Approval > Validation of information provided by the customer

2.4 Existing insured loans - Variations and Top Up premiums

Scenario

Action

LMI waiver - Legacy LMI providers ‘QBE and Helia (formerly Genworth)’

For:

A Loan Increase or other variation to an existing mortgaged insured loan, or
An internal refinance of an existing mortgaged insured loan¹, or
A new application using security collateral already covered by an existing mortgage insurance policy

Whenever the mortgage insurer’s risk is increased or amended, the mortgage insurer will be notified by the responsible processing area
Prior to the Bank notifying approval to the customer, the mortgage insurer is to approve the variation and use of the existing policy
The change will generally be applied to the existing policy and insurer
Where additional LMI is required, the premium will be calculated by using the new total exposure amount and LVR Policy, and taking into consideration any previous premiums paid by the customer (premium credits).

Exceptions apply for ‘Legacy LMI providers ‘QBE and Helia (formerly Genworth)' as detailed in the next column

Where Lender’s Mortgage Insurance is required and the existing policy cover is held with QBE or Helia (formerly Genworth):

OBP will waive Lender’s Mortgage Insurance up to the MI-Max base LVR applicable under ‘ Loan to Value Ratio (LVR) ’ policy for any of the below scenarios:
- Loan increase to the existing insured loan
- An internal refinance of the existing mortgaged insured loan
- A new application using security collateral already covered by the existing mortgage insurance policy

Applications with this waiver applied are assessed to non-LMI standards

It is not permissible to have multiple insurers with an interest in the same property.
A restructure of a new mortgage insured application is required when:

an existing security collateral offered is already covered by an existing ALMI or WLMI mortgage insurance policy, and
another existing security collateral offered is already covered by an existing QBE or Helia (formerly Genworth) mortgage insurance policy

¹ For WBC: SGB, BoM, BSA and RAMS are considered to be external providers

2.5 Requests for premium refunds

Cancellation of the policy and appropriate premium refund will be requested only where the below conditions are met. The refund process will commence automatically, once the Bank notifies the Mortgage Insurer that the loan has been paid in full and the mortgage discharged.
The decision to refund a premium is at the discretion of the Insurer.. The Bank makes no decision about whether or not a refund is due.

Scenario	Conditions
For proposals which proceed	The loan has been paid and discharged in full, and Within the first two years of the policy commencement, and The loan has not been reported to have arrears, and The loan is not in Collections, and The loan is not subject to a claim, and There are no additional loans still outstanding covered under the original LMI policy, and Where the insurer is QBE or Helia (formerly Genworth), the amount payable is not less than $500, or Where the insurer is WLMI, WLMI-A or ALMI, the amount payable is not less than $400
For proposals which do not proceed	If the proposal does not proceed for any reason and the premium has already been paid

2.5.1 Refund Rates - Loans Repaid in Full

Period from date of premium payment to date when loan has been repaid in full	Refund payable (net of stamp duty)

1 year or less	40%
Over 1 year to 2 years	20%

2.6 Premium rates and stamp duty

The below formula for calculating LMI Premiums is provided for information purposes only.

Loan Value x Effective Rate
+ Stamp Duty
+ (GST- Reduced Input Tax Credit)
= Total payable by customer

2.6.1 Premium Rates

The below Lenders Mortgage Insurance premium rates (current as at 21/08/2022) are subject to change and are for guidance only when discussing insurance with eligible customers.
Base LVR Bands	$0 - $300,000	>$300,000 - $500,000	>$500,000 - $750,000	>$750,000 - $1M	>$1M - $1.5M	>$1.5M - $2M	>$2M - $2.5M
Up to 75%	0.27	0.39	0.49	0.49	0.58	0.66	0.75
>75 - 76%	0.34	0.41	0.59	0.60	0.65	0.68	0.72
>76 - 78%	0.34	0.45	0.59	0.68	0.68	0.69	0.72
>78 - 80%	0.46	0.54	0.75	0.80	0.90	0.91	0.92
>80 - 81%	0.60	0.600	0.74	0.74	0.93	0.93	0.93
>81 - 82%	0.61	0.61	0.74	0.74	0.93	0.93	0.93
>82 - 83%	0.80	0.85	0.97	0.97	1.24	1.24	1.24
>83 - 84%	0.80	0.88	1.02	1.02	1.30	1.30	1.30
>84 - 85%	0.81	1.08	1.18	1.18	1.52	1.52	1.52
>85 - 86%	0.84	1.11	1.26	1.26	1.58	1.58	1.58
>86 - 87%	1.18	1.22	1.45	1.45	1.81	1.81	1.81
>87 - 88%	1.20	1.28	1.58	1.58	1.86	1.91	1.97
>88 - 89%	1.24	1.60	2.00	2.00	2.34	2.34	2.34
>89 - 90%	1.68	1.80	2.41	2.41	2.66	2.68	2.80
>90 - 91%	1.94	2.38	3.38	3.38	3.52	3.84	4.06
>91 - 92%	1.94	2.55	3.51	3.52	3.65	4.03	4.06
>92 - 93%	2.28	2.74	3.66	3.66	3.91	4.16	4.33
>93 - 94%	2.32	2.76	3.81	3.82	3.98	4.23	4.43
>94 - 95%	2.55	3.12	4.00	4.03	4.17	4.55	4.78

2.6.2 Stamp Duty

Stamp Duty is applicable as a percentage of the premium amount. This is calculated by the LMI Premium Calculators.

State	NSW	VIC	QLD	SA	WA	TAS	ACT	NT
Amount	0.0%	10.0%	9.0%	11.0%	10.0%	10.0%	0.0%	10.0%

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	22 May 2022	Change 1 Updated section 2.4 Duty of disclosure Added Also see Validation of information provided by the customer > Comprehensive Credit Report (CCR) mismatch (scenario table) > scenario 3 ‘The CCR shows a facility but the borrower forgot they had the facility and did not declare it.’
4	21 August 2022	Change 1 Impacted section 3.2 Premium Rates – WBC Changes made to premium rates and bands.
5	2 October 2022	Change 1 Updated sections: ‘Stamp Duty’: Added words in bold ‘Stamp Duty is applicable as a percentage of the premium amount. This is calculated by the LMI Premium Calculators. ‘Mortgage Insurers’: Identified Genworth Financial and QBE as ‘Legacy LMI provider’ Replaced instructions relating to Top Up and variations with a reference link to the updated section ‘Existing insured loans - Variations and Top Up premiums’ ‘Variations to loans’ Renamed section ‘Existing insured loans - Variations and Top Up premiums’ Replaced existing content within a table detailing the scenarios and action required (clarification only) Added the below new rules regarding LMI waiver for legacy LMI providers QBE and Genworth: ‘Where Lender’s Mortgage Insurance is required and the existing policy cover is held with QBE or Genworth: OBP will waive Lender’s Mortgage Insurance up to the MI-Max base LVR applicable under ‘ Loan to Value Ratio (LVR) ’ policy for any of the below scenarios: Loan increase to the existing insured loan An internal refinance of the existing mortgaged insured loan A new application using security collateral already covered by the existing mortgage insurance policy Applications with this waiver applied are assessed to non-LMI standards Warning: It is not permissible to have multiple insurers with an interest in the same property. OBP will prevent the processing (and re-structure will be required) of a new mortgage insured application, where: An existing security collateral offered is already covered by an existing ALMI or WLMI mortgage insurance policy, and Another existing security collateral offered is already covered by an existing QBE or Genworth mortgage insurance policy’
6	26 March 2023	Change 1 Update to show Company Name change for Mortgage Insurance Provider Genworth to Helia
7	21 May 2023	Change 1 re-format and re-wording of policy to improve clarity (with no change to policy)

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03.35 Streamlined Refinance

Policy ID

03.35

Policy Name

Streamlined Refinance

Policy Content

This policy contains commercially sensitive and confidential information. No part should be made available in any form whether printed, electronic or otherwise, outside the Westpac Group without approval from Westpac Legal or Regulatory affairs.*** This document is an UNCONTROLLED copy and is subject to change without prior notification. It is only valid at the date of extract. ***

1. About this policy
1.1 Why this policy?
2. Rules you must apply
2.1 Overview
2.2 Eligibility criteria
2.3 Streamlined Refinance - Serviceability
2.4 Streamlined Refinance - Credit bureau reporting and checks, and Commitment Verification
2.5 Streamlined Refinance - Validation of information provided by the borrower

1. About this policy

1.1 Why this policy?

The Bank may consider allowable variances to standard Consumer Policy for applications which are processed under this method and meet the requirements of this policy.

2. Rules you must apply

2.1 Overview

This policy outlines the allowable variances and requirements for accepting consumer mortgage applications under Streamlined Refinance.
Where not otherwise detailed below, all other prevailing standard non-mortgage insured policies and product offerings for fully documented loans apply.

This policy is to be read in conjunction with the policies and procedures contained in other sections of the Consumer Mortgage Credit Policy Manual.

Where an application does not meet all eligibility requirements and other conditions of this policy, it is not eligible to be processed under Streamlined Refinance, but may be processed under standard policy, where meets all standard policy requirements.

No exception authority exists outside of these eligibility criteria for a streamlined assessment application.

2.2 Eligibility Criteria

To be eligible for this policy the below requirements must be met:

Eligibility requirements	Conditions
Loan purpose	Refinance an existing mortgage (internal* or external) only *Note: Allowable internal refinance transactions are limited to: Switching between products Increasing loan term of existing loan(s) Loan consolidation(s) / amalgamation(s) A new facility with a maximum top-up amount of $50,000 per customer/ customer group per 12 months
The “new repayment” must be less than or equal to the “current repayment” Where: “new repayment” = new minimum monthly mortgage loan application repayment inclusive of any top-up / cash out amount “current repayment” = minimum monthly contracted mortgage loan repayment on the loan being refinanced, i.e.: contracted monthly P&I repayment amount for P&I loans, and the most recent months interest charge amount for Interest Only (IO) loans.	The “new repayment”: must be Principal and Interest (P&I) is calculated on the current revert interest rate* for fixed or introductory rate products can include a term extension where the application meets Maximum Loan Term and Exit (repayment) Strategy policy must be verified as being less than or equal to the “current repayment” via the latest account statement (or internal WBG brand system for internal refinances) that meets age of document requirements, refer Document Standards and: shows what the “current repayment” amount is, and evidences that it has been paid *Note: the current revert interest rate is inclusive of any life of loan discounts / adjustments.
Application is not Mortgage Insured	MI waivers under eligible special package are permitted.
The cash out / limit increase does not exceed $50,000 per refinance transaction	Where: concurrent external refinance applications are submitted, the maximum allowable cash out is across all applications, i.e. not $50,000 per application. refinancing an internal mortgage, the maximum allowable cash out applies per customer / customer group in any 12-month period, i.e. only one cash out of $50,000 is available in any 12 month period.
The new loan application must match with the: borrowers of the loan(s) being refinanced, and the current owners on the certificate of title of the security collateral(s)	Application cannot have any: addition or removal of a party from the loan and/or security collateral, or Guarantor of any kind, refer Exclusions
Exclusions	Application does not include: unsecured debt consolidation or secured debt reduction (internal or external) refinance of a secured business debt, private loan, portfolio loan or other secured line of credit Guarantor(s) of any kind borrower(s) that has: declared that they are aware of any foreseeable material or adverse changes to their financial situation. A Comprehensive Credit Report (CCR) bureau score below 650 not met all credit history and CCR conditions detailed in Credit bureau reporting and checks, and commitment verification

2.3 Streamlined Refinance - Serviceability

Standard serviceability and income verification policy applies, refer Serviceability Assessment and Verifying Income.

However, where all Streamlined Refinance eligibility criteria and conditions are met, but serviceability is not met under standard serviceability assessment, a modified Serviceability Assessment Rate (SAR) may be applied as an exception to serviceability policy as below, via referral to Credit:

A minimum interest rate buffer of 1.00% (in lieu of 3.00%) will be applied in the Benchmark Repayment Amount, where SAR considers the final rate plus interest rate buffer in the serviceability calculation, for the new and / or any existing consumer mortgage liability(s)*.
The standard Floor Rate will continue to apply in the Benchmark Repayment Amount Calculation, refer Serviceability Assessment > Serviceability Assessment Rate (SAR) – Mortgage.

Where Credit use this exception approach and approve an application based on a minimum 1% buffer SAR assessment, this must be captured as a servicing Override with Streamlined Refinance as the secondary reason code.

*Secured mortgage types eligible to be assessed using the modified 1% approach, where serviceability is not met under standard serviceability policy:

New consumer / residential lending:
- Mortgages – Owner occupied and investment
Existing consumer / residential liabilities:
- Mortgages – Owner occupied and investment
- Portfolio loans and other secured lines of credit
- Reverse mortgage (IO)

2.4 Streamlined Refinance - Credit bureau reporting and checks, and commitment verification

Where any commitment does not meet the requirements detailed in the below table, the application cannot proceed under Streamlined Refinance.

Policy	Conditions
New commitments	Where a commitment* has: recently been or will be opened (i.e. a declared pending commitment), and/or less than 4 months clear credit history via CCR The application cannot proceed under Streamlined Refinance policy. *Note: excludes non-CCR commitment types listed below
Non-CCR commitments limited to only: Centrelink debt Study training and support loans – STSL Tax bill Business loan (secured or unsecured), includes: Commercial bill products Business loans secured by commercial properties Overdrafts Buy Now Pay Later – BNPL Hire Purchase Lease Margin loan Auto loan Private loan	Non-refinance only Refer Commitments > Confirm the details of the commitment for the verification requirements for the relevant commitment type Where any of these commitment types are on CCR, refer CCR commitment conditions below. If not shown on CCR, these commitment types only, are excluded from both CCR and manual repayment history and financial hardship arrangement checks.
CCR commitments, i.e. Consumer / residential mortgage Credit cards Personal loans Personal overdrafts Personal Line of Credit The above commitment types must be reported on CCR for the required minimum timeframe and evidence satisfactory repayment history Refer Commitments > Financial Hardship arrangement check and evidence satisfactory repayment history Note: where a non-CCR commitment type (listed above) is not shown on CCR these requirements do not apply.	All commitments on CCR must show clear repayment history in the last 12 months, i.e. the OBP loan assessment system will check that: At least one ‘0’ is reported in the last 3 months for any home loan commitment, and No arrears are reported in the last 12 months for any open or closed commitment, and The mortgage(s) being refinanced has been opened for at least 12 months with the same lender, and All non-refinancing commitments have been opened for at least 4 months
	Financial Hardship arrangement check Where CCR evidences a hardship arrangement on any commitment within the last 12 months, the application is not eligible to be processed under Streamlined Refinance
	Refer Commitments > Confirm the details of the commitment for the verification requirements for the relevant commitment type

2.5 Streamlined Refinance -Validation of information provided by the borrower

Streamlined Refinance is supported where policy Eligibility criteria and the below conditions are met.

Policy	Conditions
Validation of information provided by the borrower	Applications eligible under Streamlined Refinance do not require collection of 3 months statements or standard account scrutiny to validate expenses or check for undisclosed liabilities (excluding CCR mismatches). Where any other conflicting information, red flags or signs of vulnerability are identified, these must be actioned, refer Loan Application and Approval > Validation of information provided by customer > Reviewing customer provided information > Conflicts to look for > Other
Validation of information provided by the borrower	The borrower declared living expenses will be accepted as declared, but must be manually captured and adhere to requirements detailed in Living Expenses policy.

Change History

Amendment number

Amendment issue date

Description of changes

21 May 2023

First OBP issue online for Brokers

2 July 2023

Change 1
Reformatted section 2.2 Eligibility Criteria into table format and minor wording update.

Change 2
The following content moved from section 2.2 Eligibility Criteria to section 2.1 Overview
Where an application does not meet all eligibility requirements and conditions of this policy, it is not eligible to be processed under Streamlined Refinance, but may be processed under standard policy, where meets all standard policy requirements.

No exception authority exists outside of these eligibility criteria for a streamlined assessment application.

Change 3
Updated section 2.4 Streamlined Refinance - Credit bureau reporting and checks, and commitment verification:

To include Auto Loans in Non-CCR commitments
Re-word CCR commitments to clarify repayment history requirements and add the following note:

Note: any commitment on CCR reflected as being ‘closed’ within the last 12 months, must show clear repayment history for each month that the commitment was open in the last 12-month period (R & P values are acceptable)

20 August 2023

Change 1
Updated section 2.2 Eligibility Criteria to include the following note in relation to the current revert interest rate:

*Note: the current revert interest rate is inclusive of any life of loan discounts / adjustments

Change 2
Updated section 2.4 Streamlined Refinance – Credit bureau reporting and checks, and commitment verification to reflect that all non-refinancing commitments must be open for 4 months and to replace the current manual check of CCR PDF with the new automated account conduct rules:
Old wording

CCR commitments, i.e.

Consumer / residential mortgage
Credit cards
Personal loans
Personal overdrafts
Personal Line of Credit

Must be reported on CCR for the required minimum timeframe and evidence satisfactory repayment history

Refer Commitments > Financial Hardship arrangement check and evidence satisfactory repayment history

Note: where a non-CCR commitment type (listed above) is not shown on CCR these requirements do not apply.

A manual review of the CCR PDF is required to confirm all commitments on CCR have clear repayment history in the last 12 months, i.e.:

No CCR repayment history values other than ‘0’, ‘R’ or ‘P’ are acceptable for any liability in the last 12 months (both refinance and non-refinance)
AND

The mortgage(s) being refinanced:
has been opened for at least 12 months, and
shows 12 months consecutive repayment history with at least 10 ‘0’ values, and
no other values shown apart from ‘R’ or ‘P’.
All non-refinancing commitments:
have been opened for at least 3 months, and
show at least 3 ‘0’, and
no other values shown apart from ‘R’ or ‘P’
For any non-refinancing commitment that has been open for more than 3 months, a period of up to 12 months must be reviewed, with the only acceptable values in that period being ‘0’, ‘R’ and ‘P’

All CCR commitment types must be visible on CCR with the above minimum time periods and clear conduct validated
Note: any commitment on CCR reflected as being ‘closed’ within the last 12 months, must show clear repayment history for each month that the commitment was open in the last 12-month period (R & P values are acceptable)

New wording

All commitments on CCR must show clear repayment history in the last 12 months, i.e. OBP will check that:

At least one ‘0’ is reported in the last 3 months for any home loan commitment, and
No arrears are reported in the last 12 months for any open or closed commitment, and
The mortgage(s) being refinanced has been opened for at least 12 months with the same lender, and
All non-refinancing commitments have been opened for at least 4 months

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03.36 Home Guarantee Scheme (HGS)

Policy ID

03.36

Policy Name

Home Guarantee Scheme (HGS)

Policy Content

1.1 Why this policy?

1.2 What is the Home Guarantee Scheme (HGS)

1.3 Home Guarantee Scheme definitions

2. Rules you must apply
2.1 Overview
2.2 Eligibility Criteria
2.3 Verifying Income
2.4 Home Guarantee Scheme LVR
2.5 Home Guarantee Scheme Conditions
2.6 Verification of information provided by the borrower
2.7 Acceptable Security Collateral

1. About this policy

1.1 Why this policy?
This policy will help you to identify a borrower’s eligibility for a Home Guarantee Scheme (HGS) backed consumer mortgage loan.
This offering only applies to WBC brand. It is not available to SGB / BoM / BSA.

1.2 What is the Home Guarantee Scheme (HGS)

The Home Guarantee Scheme (HGS) is an Australian Government initiative aimed at supporting eligible borrowers to purchase an owner-occupied home without the need for mortgage insurance.
The Home Guarantee Scheme includes:

First Home Guarantee (FHBG)
Regional First Home Buyer Guarantee (RFHBG)
Family Home Guarantee (FHG)

For further information on the Home Guarantee Schemes, refer to www.nhfic.gov.au

1.3 Home Guarantee Schemes (HGS) definitions

Scheme type	Definition
First Home Guarantee (FHBG)	Supports eligible first home buyers with the purchase of an owner-occupied dwelling, with a minimum deposit of 5%, without the need for mortgage insurance.
Regional First Home Buyer Guarantee (RFHBG)	Supports eligible regional first home buyers with the purchase of an owner-occupied dwelling, with a minimum deposit of 5%, without the need for mortgage insurance.
Family Home Guarantee (FHG)	Supports eligible single parents with at least one dependent, with the purchase of an owner-occupied dwelling, with a minimum deposit of 2%, without the need for mortgage insurance. Note: May have previously held ownership in a residential property in Australia but must not have any current ownership in a residential property in Australia.

2. Rules you must apply

2.1 Overview

This policy outlines Home Guarantee Schemes (HGS) that are supported for consumer mortgage loans and the borrower eligibility requirements for each scheme.
All other prevailing mortgage insured policies for fully documented loans apply, i.e.:

Time in employment, refer Verifying Income > PAYG Salary or Wage – Definitions and Time in Employment
Commitment repayment history check for liabilities not on CCR, refer > Commitments > Financial hardship arrangement check and evidence satisfactory repayment history
Valuation requirements, refer Security Collateral Value Assessment > Rules you must apply
Adverse bureau

This policy is to be read in conjunction with the policies and procedures contained in other sections of the Consumer Mortgage Credit Policy Manual

2.2 Eligibility Criteria

To be eligible for any of the Home Guarantee Schemes defined in this policy, all of the below must be met:

Borrower(s) must:
- be an Australian citizen and meet the definition of an individual borrower, refer Verification of information provided by the borrower , and
- comply with co-borrower eligibility requirements (where applicable), refer Eligibility > Co-borrower eligibility requirements.
Loan purpose is owner occupied purchase, construction (licensed builder) or refinance (internal or external)
The loan application is Principal and Interest (P&I), excluding construction IO period, where applicable.
Maximum loan term of 30 years inclusive of any construction period (where applicable), i.e.:
- Where the application is for the construction of an owner-occupied dwelling, the maximum loan term is 28 years.
The borrower’s prior financial year annual taxable income must not exceed the annual income limit:
- Single borrower annual taxable income must be less than or equal to $125,000*
- Joint borrowers combined annual taxable income must be less than or equal to $200,000
The borrower(s) on the new loan must be the same as the purchaser / owner(s) of the security collateral property
The security collateral must be an acceptable property type, refer Acceptable Security Collateral
Genuine savings must be met regardless of LVR, refer Home Guarantee Scheme Conditions
Must not exceed maximum retained savings requirement, refer Verification of information provided by the borrower
Property purchase price does not exceed the maximum property price cap for the location, refer Property Price Cap Tool

*Note: Child support payments (where applicable) are excluded from the annual income limit, under Family Home Guarantee (FHG) scheme.

Exclusions:

Owner-builder or cost-plus constructions
Unsecured debt consolidation or secured debt reduction
Loan increase (top-up)
Guarantor(s) of any kind i.e. family, income, income plus security or security guarantee

Refer also to Home Guarantee Scheme Conditions

2.3 Verifying Income

Income and employment verification to Mortgage Insurance standards is required, refer:

2.4 Home Guarantee Scheme LVR

The table below details the maximum allowable LVR that applies to each HGS type, where the borrower(s) meets the Eligibility criteria.
Any lower LVR threshold policies will override this policy, refer to Loan to Value Ratio (LVR).

Home Guarantee Scheme	Maximum LVR
First Home Guarantee (FHBG)	<=95%
Regional First Home Buyer Guarantee (RGHBG)	<=95%
Family Home Guarantee (FHG)	<=98%

2.5 Home Guarantee Scheme Conditions

In addition to meeting the requirements detailed in Eligibility Criteria, the following HGS conditions must also be met.
Refer also to Verification of information provided by the borrower.

Loan Type	HGS Type	Conditions
Purchase	First Home Guarantee (FHBG)	Individual or joint with spouse (married or de facto) Borrower(s) must: o be a first home buyer 5% genuine savings must be evidenced regardless of LVR, refer Genuine Savings, Equity and Customer Contribution > Genuine Savings
	Regional First Home Buyer Guarantee (RFHBG)	In addition to conditions listed above under First Home Guarantee (FHBG): At least one borrower must currently and for the prior 12 months, have resided in the regional or adjacent regional area they are purchasing in, as at the Home Buyer Declaration date, and The property being purchased must be within the current, adjacent or across (border) the same regional area in which the borrower currently lives or has lived in the previous 12 months.
	Family Home Guarantee (FHG)	Maximum of one (1) borrower Borrower must be a single parent, with at least one dependent* May be a first home buyer or previously held ownership in a residential property in Australia, but at the time of Home Buyer Declaration date, must not currently have any ownership in a property in Australia 2% genuine savings must be evidenced regardless of LVR, refer Genuine Savings, Equity and Customer Contribution > Genuine Savings *Note: By completing and signing the Home Buyer Declaration Form, the applicant confirms that they are the parent or legal guardian of at least one dependent child, as defined under the Family Home Guarantee Scheme eligibility, i.e.: Within the meaning of section 5, sub-sections (2), (3), (4), (5), (6) and (7) of the Social Security Act 1991, or aged between 16 and 21 years of age, in receipt of a disability support pension and lives with the applicant This is separate to the requirement to capture a dependent(s), as defined by the Bank, for inclusion in the serviceability assessment, refer Living Expenses > Definition of a dependent
Refinance (Internal or external)	All	The borrower(s) on the new loan application must be the same as the borrower(s) on the existing schemed backed loan being refinanced* The new loan is for the refinance of the same residential property that is presently mortgaged under the existing scheme-backed loan For the purpose of paying out the existing Scheme-backed loan only, i.e. the new loan must not be: o For an amount that is more than the permitted maximum loan amount, i.e. the scheduled principal balance of the existing scheme-backed loan as at the loan settlement date for the refinancing loan o For a term that is more than the permitted loan term remaining on the existing scheme-backed loan. The loan being refinanced must not be in arrears or default *Note: Where the existing scheme-backed loan being refinanced is in joint names (FHBG or RFHBG only), it is acceptable for the new loan to be in the name of one or both existing borrowers, providing matches with name(s) on title It is not acceptable to add a borrower to the new loan

2.6 Verification of information provided by the borrower

Where Eligibility criteria and Home Guarantee Scheme conditions are met, the following verification requirements apply.

Home Guarantee Scheme	Action requiring verification	Verification requirement
All Refer also First Home Guarantee (FHBG) Regional First Home Buyer Guarantee (RFHBG) Family Home Guarantee (FHG)	Borrower(s) is an: eligible ‘individual’ borrower And Australian Citizen	Refer: Eligibility > Eligible Borrowers for a Consumer Mortgage Loan and Australian citizen residency status > Additional conditions
	Income <= annual income limit: $125,000 single borrower $200,000 joint spousal (married or de facto) borrowers	Taxable income amount(s) from the previous year’s ATO Notice of Assessment (NOA). Notes: ATO NOA must meet maximum age of document requirements, refer Document Standards > Rules you must apply > Minimum Document Standards Table Where the borrower is not required to lodge a tax return (i.e. income earned in the prior financial year was $nil or below the tax free income threshold) and therefore not able to provide an ATO NOA, a copy of the borrower’s ATO ‘Non-lodgement Advice’ must be provided.
	Retained savings	Borrower(s) must use the maximum amount of savings as their deposit, i.e. the retained savings should not be more than: Funds set aside for outgoing costs associated with the property purchase (e.g. stamp duty, legal fees etc), and Three (3) months of expenses Notes: Where the loan is for a construction, an additional 10% of the value of the builder contract price can be retained Where a full valuation (if required) or building inspection report details essential repairs are required, and the estimated cost of the repairs is within the ‘Mortgage Insured’ repair limit, refer Security Collateral Value Assessment > Risk Rating in Valuation Report, funds can be retained to cover this cost.
First Home Guarantee (FHBG)	All borrowers must: Be first home buyers	Review borrower(s) CCR bureau report for evidence of a current or closed mortgage(s) commitment, and Peruse Internal systems or bank statements (where applicable), for evidence of any property related expenses which may identify current or prior ownership in a property (e.g. council rates) AND The Home Buyer Declaration Form Note: Where current or prior mortgage / property ownership is identified, the application is not eligible under FHBG or RFHBG
First Home Guarantee (FHBG)	Joint borrowers (where applicable) must be in a spousal relationship (married or de facto)	Any one of the following: Marriage certificate, or Scrutiny check of supporting documents or accounts for identifiers of spousal relationship (e.g. joint accounts), or Utility bills in both names, or Rental statement or tenancy agreement in both names, or Previous financial year Australian Taxation Return reflecting spouse
Regional First Home Buyer Guarantee (RFHBG)	All borrowers must: Be first home buyers	Same as verification requirements for First Home Guarantee
	Joint borrowers (where applicable) must be in a spousal relationship (married or de facto)	Same as verification requirements for First Home Guarantee
	At least one borrower currently and for the previous 12 months* has lived in the regional or an adjacent regional area where the property is being purchased^,. *Notes: The borrower may have had multiple addresses across the same or adjacent regional area during the prior 12 months Partial exemption allowable for members of the Australian Defence Force	Any one of the following supporting document types is acceptable, where the document(s) covers a full 12-month period: Utility notice(s), or Rental agreement(s) or statement(s), or Bank statement(s), or Mobile phone statement(s), or 2 consecutive ATO Notice of Assessments AND Checking the postcode using the NHFIC regional checker to confirm that the suburb is in the same or adjacent regional area, as the property that the borrower(s) is purchasing Where the borrower is a member of the Australian Defence Force: an official statement evidencing any posting in the course of the borrower performing their duties over the previous 12 months is required Note: Only the most recent supporting document is required to meet the age of documents requirement, where multiple documents are required to evidence full 12 months history.
Family Home Guarantee (FHG)	Marital status of ‘Single’ (Includes not in a de facto relationship)	Where the borrower’s marital status is: Single (includes not in a de facto relationship): The Home Buyer Declaration Form, and Scrutiny check of supporting documents or accounts for identifiers of spousal relationship (e.g. joint accounts) Divorced - a copy of final divorce approval is required. Widowed: a copy of the deceased spouse’s death certificate is required, or The tax return document from the year that the deceased spouse passed away Note: Where an applicant is separated, but not yet divorced, they are not eligible under FHG
	Borrower meets the requirements of an eligible single parent	Borrower must be the natural or adoptive parent of at least one dependent, evidenced via: Child’s birth certificate, or Formal adoption order, or Consent order by Family Court, or Centrelink letter: Confirming care arrangements for a dependent child(ren) Evidencing receipt of a disability support pension, where dependent is >=16 but < 22 years and is in receipt of a disability pension, or Borrower’s previous financial year Australian Taxation Return (Question IT8) And The Home Buyer Declaration Form
	Borrower must not currently have any ownership in residential property in Australia, i.e.: Freehold interest in real property Lease of land A company title interest	The borrower’s CCR bureau report must be reviewed and where it is identified that the borrower has a current mortgage commitment, the application is not eligible under FHG, and Where account scrutiny activity identifies any property related expenses (e.g. council rates), confirmation required that the expense does not relate to current ownership of a property within Australia.

2.7 Acceptable Security Collateral

The following property types are acceptable security collateral for HGS loans:

Detached / semi-detached house
Duplex
Terrace / Townhouse /Unit / Apartment / Villa

Licenced Builder House Construction (i.e. land and a separate contract to build a home)

House and land package
Rural Residential less than or equal to 8ha
Rural Residential greater than 8ha less than 50ha
Off the plan purchase where the settlement date is within 90 days of the guarantee issue date.

Any security type not listed above, is unacceptable under Home Guarantee Scheme (HGS).

Change History

Amendment
number

Amendment
issue date

Description of changes

2 July 2023

First OBP issue online for Brokers

20 August 2023

Change 1

Updated section 2.6 Verification of information provided by the borrower to include:

supporting document requirement for validation of NHFIC income threshold where the borrower was not required to lodge a tax return and hence not able to supply an ATO NOA, and
retained savings allowance for essential repairs where noted in a full valuation (if required) or building inspection report.

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WBC Mortgage Broking OBP Policy no title

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06.02 Bridging Loan

Policy ID

06.02

Policy Name

Bridging Loan

Policy Content

1. Description
2. Purpose
3. Eligibility
4. Security collateral
5. Special conditions
6. Sale equity rule
6.1 Repayment where more than one security to be sold
7. Interest
8. Policy exclusions

1. Description

A variable rate Interest Capitalised loan for short-term finance, to enable the borrower to purchase a new owner-occupied residential property prior to an existing residential property being sold.
The net sale proceeds of the existing property are used to repay the Bridging Loan in full.

2. Purpose

The loan funds can only be used for:

Owner Occupied property purchase

Also refer to Loan Purpose section of the Eligibility Policy.

3. Eligibility

Applicant(s) can be:

Individuals
Discretionary or Family trusts (individual trustees only).

Owner occupied home loans can only be made available in the name of a trust if the beneficiaries are to occupy the property (i.e. not the trustees).

Also refer to Eligibility policy > Eligible Borrowers for a Consumer Mortgage Loan.

Not available for:

Investment purposes
Owner builders
Partnerships
Unit trusts
Family-Security Guarantee
Purchasing vacant land with no intention to complete a build within 12 months
Companies
2nd mortgages
Loan increases
Debt consolidation
Refinances
Business purposes
Discretionary or Family trusts (non-individual trustees)

4. Security collateral

Security collateral:

is to be a registered mortgage over the residential owner occupied property(s) and
must include both the existing property (the current residence being sold) and the new property (the future residence being purchased)
cannot be cross-collateralised to support other home loans

5. Special conditions

A Bridging Loan can be originated in combination with another home loan
The Bridging Loan must be repaid in full via the net sale proceeds of the existing (sale) property. Refer to Sale Equity Rule
Maximum 12 month term
Must comply with Lending Value Ratio (LVR) policy for Bridging Loans
The progressive drawdown option is not available

6. Sale Equity Rule

To ensure the Bridging Loan will clear from the net sale proceeds of the existing property, the proposed Bridging portion of the loan cannot exceed:

85% of the security collateral value of the existing property(s) to be sold

This rule applies to the bridging portion of the loan only not any end debt.

Also refer to ‘Security Collateral Value Assessment’ policy.

6.1 Repayment where more than one security to be sold

Full net proceeds (including purchasers deposit paid) must always be received to the Bridging Loan and
Remaining Bridging Loan debt against the security collateral value of the remaining property(s) to be sold cannot exceed the Sale Equity Rule and
Overall LVR must comply with Lending Value Ratio (LVR) policy for Bridging Loans

7. Interest

Interest must be capitalised.

8. Policy exclusions

The below policies, either in part or in full do not apply to Bridging ICAP loans with no end debt. Refer to each policy to identify the applicable exclusions.

Serviceability Assessment
Verifying Income
Commitments
Living Expenses
Maximum Loan Term and Exit (Repayment) Strategy > Exit (Repayment) Strategy - Responsible Lending
Loan Application and Approval > Validation of information provided by the customer

Change History

Amendment number	Amendment issue date	Description of changes
1	3 November 2021	First OBP issue online for Brokers on the OKA platform.
2	10 November 2021	Links updated
3	26 July 2022	Updated section ‘Security collateral’ to include 'cannot be cross-collateralised to support other home loans.’
4	2 October 2022	Change 1 Update to section 3. Eligibility Old wording Also refer to Eligible Borrowers section of the Eligibility Policy New wording Also refer Eligibility Policy > Eligible Borrowers for a Consumer Mortgage Loan Change 2 Update to section 8. Policy exclusions Old wording Maximum Loan Term>Exit Strategy policy New wording Maximum Loan term and Exit (Repayment) Strategy > Exit (Repayment) Strategy – Responsible Lending
5	21 May 2023	Throughout document, redirected references and links from ‘Validation of information provided by the customer’ policy chapter to ‘Loan Application and Approval > Validation of information provided by the customer’. Housekeeping change only

Rate this policy Submitting... Thank you for your feedback! There was an error with your submission. Please try again.	Published Date Published Date 21/05/2023

03.01 Maximum Loan Term and Exit (Repayment) Strategy

Table of Contents

1. About this policy

1.1 Why this policy?

2. Rules you must apply

2.1 Maximum loan term

2.1.1 Maximum Loan Term for interest only (IO) products

2.2 Exit (Repayment) Strategy – Responsible Lending

2.2.1 Retirement age and exit / repayment strategy

2.2.1 Exit (repayment) strategy exclusions

3. Process to follow

3.1 Record Keeping Requirement under Responsible Lending

3.2 Exit strategy-Non-real estate and real estate assets

3.2.1 Shareholding calculation

3.2.2 ASIC MoneySmart Superannuation Calculator settings

4. Guidelines

4.1 Examples of acceptable and non-compliant responses to exit strategy questions

4.2 Examples of acceptable and non-acceptable use of Superannuation lump sum as exit strategy

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03.02 Acceptable Security Collateral

Table of Contents

1. About this policy

1.1 Why this policy

1.2 What is residential real estate security collateral?

Requirement

Policy Rules

2. Rules you must apply

2.1 Certificate of title

Requirement

Policy Rules

2.1.1 Second Mortgage behind other financial institution (OFI)

2.2 Assessing security collateral requirements - standard real estate

Category

Additional policy rules

2.3 Security Development Register (SDR)

Category

Action

2.3.1 Adding a development to the SDR

2.4 Assessing security collateral requirements - non-standard development

2.4.1 Non-standard development definition

2.4.2 Responsibilities

Party

Responsibility

2.4.3 Non-standard development inclusion on the SDR

Category

Attributes

2.5 Assessing security collateral requirements-general

Category

Additional requirements

2.6 Assessing security collateral impacted by geographical or environmental issues

Category

Policy Rules

2.7 Assessing security collateral by location

2.8 Assessing third party security collateral

2.9 Assessing non-real estate security collateral

2.10 Assessing unacceptable security collateral

2.11 Assessing specialised security collateral

2.11.1 Security under the National Rental Affordability Scheme (NRAS)

NRAS type

Requirement

2.11.1.1 Headlease -NRAS specific documentation and verification requirements

Approved Head Lease Consortiums At this time applications cannot be accepted from any other consortiums

NRAS specific documentation and verification requirements

2.11.1.2 NEJV - NRAS specific documentation and verification requirements

Approved NEJV Consortiums

NRAS specific documentation and verification requirements

The below consortiums do not have NRAS specific documentation and verification requirements

2.11.2 ACT asbestos affected homes ("Mr Fluffy")

2.11.3 NSW asbestos affected homes ("Mr Fluffy")

2.11.4 Homes for Homes (H4H)

3. Process to follow

State

Prevents

Letter of Consent requirements

Withdrawal of Caveat for paper settlement and standalone electronic lodgement process

PEXA lodgement, settlement process, and where caveat is to remain

2.11.2.2 NEJV - NRAS specific documentation and verification requirements

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Approved Head Lease Consortiums

At this time applications cannot be accepted from any other consortiums